12 April 2018

Business SA commends the South Australian Opposition for its decision to support payroll tax relief for businesses, with wage bills of up to $1.5 million.

Labor leader Peter Malinauskas has this morning said that he would support business growth in South Australia, including the new State Government’s moves to lift payroll tax thresholds.

Business SA Executive Director Industry and Government Engagement, Anthony Penney, said after years of debate over payroll tax and its harmful effects on businesses and employees, including acting as a tax on growth and jobs, it was pleasing to see both major political parties agree that changes were needed.

“Lifting the payroll tax threshold is essential if we want to see South Australian businesses prosper and our state grow,” Mr Penney said.

“Increasing the threshold to $1.5m would see South Australia no longer have the nation’s lowest rate at which it is introduced, which has meant the state has not been able to compete on a level playing field when trying to attract new business.”

However, Mr Penney said there was a need to see the details of the new policy being proposed to ensure all businesses would benefit and there would be no disincentives for businesses operating near the threshold cut-off to employ additional staff.

“Payroll tax has been one of the highest priorities for Business SA as a the peak representative body for the state’s business community, and we prioritised changes to the threshold and the rate at which it is applied in our 2018 Charter for a More Prosperous South Australia,” he said.

“Prior to the election, Business SA also released an issues paper on payroll tax, including several examples of how payroll tax impacted on small to medium-sized employers, and included evidence on how increasing the threshold and reducing the rate could support economic growth, tax revenue and employment.”

Mr Malinauskas this morning said: “In Labor, we believe in jobs… small to medium business is the engine room of our economy. We support, and I support, payroll tax reductions because it should result in more jobs. That’s good for everybody, but particularly good for working families.”

Mr Penney said it was pleasing to see the Labor Opposition come out in support of South Australian businesses, and he hoped it would continue.

To view the Payroll Tax Focus Paper, please click here.