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More calls to cut payroll tax
More calls to cut payroll tax

Calls to cut payroll tax have intensified, with new data showing the number of Western Australian businesses being caught in the tax net has surged by 45 per cent in four years.

And almost 700 new businesses will be slugged the levy in the coming financial year, according to Department of Finance estimates.

Opposition finance spokesman Ken Travers said the increase was reflected in growing payroll tax revenue collected by the State Government. In 2007-08 the Government raked in $1.9 billion in payroll tax, he said. The figure was expected to grow to $3 billion this financial year.

"The last time we had any major change in the payroll tax settings was in 2005," Mr Travers said.

Payroll tax kicks in for a firm with an annual wages bill above $750,000.

Without an increase in this threshold, more firms have to pay the levy as the economy - and their businesses - grow.

The Government gave $128 million in temporary payroll tax relief to about 6700 small business in last month's Budget. It followed a similar move during the global financial crisis.

Christian Porter stepped down as Treasurer this week after announcing he was going to pursue a career in Federal politics.

His position is being filled temporarily by Premier Colin Barnett.

A spokeswoman for the Treasurer said that the jump was a sign of growing employment in WA, and the State's threshold was higher than NSW, Victoria and South Australia.

"WA's labour market performance and overall economic performance is the strongest in the nation," she said.

Oliver Moon, chief executive of the Combined Small Business Alliance of WA, said it was pleased with the temporary tax relief in the Budget but the Government needed to consider permanent cuts.

The Chamber of Commerce and Industry said the Government's expected surplus of $1.4 billion in 2015-16 showed it could afford permanent payroll tax relief

Mr Travers would not say whether Labor would cut payroll tax if it won power at next March's election, as it was still assessing its priorities following the recent Budget.