Small and medium businesses will receive financial relief with the State Government set to cut payroll tax to encourage employment and investment.
The McGowan Government made the announcement on Thursday that will benefit nearly 12,000 small and medium businesses to expand and create jobs.
Under the plan, the payroll tax exemption will be increased by $150,000 over the next two years, under the government’s $170 million payroll tax package.
The new threshold will result in around 1,000 businesses no longer being liable for any payroll tax, while also cutting payroll tax liability for an additional 11,000 businesses.
WA businesses with Australia-wide payrolls up to $850,000 are currently exempt from payroll tax.
The threshold will increase to $950,000 from January 1 2020 and once again to $1 million from January 1, 2021.
The government said it would support businesses that were “doing it tough.”
“We think small business is the heart and soul of our economy, it employs 491 thousand West Australians,” Premier Mark McGowan said.
“We want to make sure it provides some relief to allow them to get on and do what they do best, which is employ West Australians.”
Mr McGowan said that the move was the result of strong financial management, claiming “it has been hard and it’s been a lot of work and a lot of attention by the cabinet to get to this position.”
Treasurer Ben Wyatt said the McGowan government wanted to reward and encourage businesses to invest in themselves.
“It’s the small and medium sized businesses in Western Australia that take the risk, that invest the capital that employ Western Australians that really drive the jobs growth in Western Australia,” Mr Wyatt said.
“We’ve wanted to now for some time if the capacity came along to increase the payroll tax threshold. We now have that capacity.”
Small Business Minister Paul Papalia said small businesses were big winners in WA’s economy with employment and contributing more than $48 billion to WA.
He said the plans would boost businesses.
“Raising the payroll tax threshold will reduce the financial barrier for small businesses considering expansion of their operations and employing more staff, which will help grow jobs and further boost the economy,” Mr Papalia said.
Hospitality business owner Glen Pope said he was encouraged by the threshold changes.
The owner of Lot Six Zero said there were benefits for businesses.
“It gives me more money to reinvest in my business, it gives me more money to employ more people and keep a lot of people below the threshold now,” Mr Pope said.
He added it would help more young people into work.
“Of course,” Mr Pope said.
“In this industry it’s mostly under 30 year olds that are looking for employment.”