30 March 2015 PAYROLL TAX HIKE WILL HURT BUSINESS Statement from CCI Chief Executive Officer Deidre Willmott The State Government’s decision to increase the payroll tax burden has further added to costs and caused businesses to scale back hiring workers, according to a survey of Western Australian businesses. The Chamber of Commerce and Industry Western Australia (CCIWA) surveyed 606 of its members about the impact of the State Government’s decision to increase the payroll tax burden by $418 million over the next three years. The Government will do this by deferring the planned increase to the exemption threshold and introducing a clawback policy which would see the exemption threshold reduced as a business’ payroll grows in size The clear majority of businesses surveyed said the payroll tax hikes would hurt profitability, curtail new employment, lead to lower pay rises for staff and hit new capital investment. Because of the clawback policy: • 84 per cent of businesses expected to be less profitable • 82 per cent were less likely to increase staff wages • 81 per cent of businesses expected to hire fewer new employees. Three quarters of businesses also said they were more unlikely to increase wages because of the deferral of a planned increase in the payroll tax exemption. CCIWA Chief Executive Officer Deidre Willmott said increasing the payroll tax burden was not the right move to address the State’s budget challenges. “Our survey found the payroll tax increases would hurt businesses, workers and the unemployed at a time when confidence was already low and the Government should be doing everything in its power to encourage investment and jobs growth,” Ms Willmott said. “Instead of increasing taxes on business, the government must focus on scaling back its spending and making the public sector more efficient to bring the budget back under control. “The payroll tax hike should be scrapped as soon as possible so people have the confidence to invest in their business, put on new workers and get this State working again.” Contact: Byron Vale – 0468 988 911 Chamber of Commerce and Industry Western Australia 180 Hay Street, East Perth, Western Australia 6004 | P: (08) 9365 7555 | F: (08) 9365 7550 | E: info@cciwa.com