The South Australian Business Chamber, South Australia’s Chamber of Commerce and Industry is calling on the State Government to assist regional businesses by implementing payroll tax discounts in the upcoming state budget.
In a submission ahead of the June budget, the Chamber, which boasts a membership of almost one-third regional businesses, recommends those operating in the regions receive a payroll tax discount of 50% to help alleviate costs and enhance competitiveness in comparison to businesses over the border.
The South Australian Business Chamber General Manager of Policy and Advocacy Kendall Crowe says payroll tax is one of the most constraining state-based taxes for businesses.
“We want to see our state’s regional businesses flourish. Payroll tax is a significant hindrance to growing and operating a small business”.
While South Australian employers saw an adjustment to payroll tax thresholds in 2019, those with a turnover above $1.7m still pay the same rate they did in 2009. Meanwhile, Victoria, New South Wales, the Northern Territory, and Tasmania have all lowered their general payroll tax rates, with both Victoria and Queensland introducing regional rate discounts.
Regional Victorian businesses above the payroll tax threshold pay just 1.2125%, compared to 4.85% for metropolitan businesses.
“A business operating in Mount Gambier pays more than three times the amount of payroll tax than a competitor located 20km over the Victorian border.
“Such a difference in payroll tax rates means regional South Australian businesses, particularly along the Victorian border are significantly less competitive.
“Introducing a 50% discount on regional payroll tax would reduce this disparity and not only help these businesses to grow, but also attract new businesses and investment in the regions”, Ms Crowe added.
The South Australian Business Chamber recommends the State Government adopt a similar model to those established in Victoria and Queensland. To qualify, an employer’s principal place of business must be located in a regional area, and at least 85% of their staff must be living and working in a regional area.
Estimates indicate this change will have a positive impact on more than 700 regional businesses. The cost to State Government will be well worth the trade-off, for long-term enhanced business activity and economic growth in the regions.
The South Australian Business Chamber’s pitch to reduce payroll tax in South Australia’s regions forms part of 15 recommendations made to the State Government for consideration in the June Budget, to drive business in our state forward in the next financial year.
MEDIA CONTACT
Anthony Caldwell, Manager – Marketing, Media, Communications
Phone – 0421 508 075
Email – anthony.caldwell@business-sa.com
