The Leader of the South Australian Liberal Party has announced his support for two of the six recommendations made by the South Australian Business Chamber to reform payroll tax in the upcoming state budget.
David Speirs took to social media on Monday night, announcing that, should a Liberal government come to power in 2026, they would increase the current payroll tax threshold from $1.5 million to $2.1 million, saving small businesses tens of thousands of dollars a year.
He also supported an exemption for apprentices and trainees to help address the skills shortage, though he did not adopt the suggestion to include new graduates in this exemption.
Mr Speirs shared his vision for South Australia as a place where small businesses can achieve great things. He emphasised the need to lower the cost of doing business in the state by cutting taxes and creating jobs.
The last adjustment to the payroll tax threshold was made under an election promise by former Liberal leader Steven Marshall, who used his party’s 2018 election campaign launch to announce an increase in the threshold from $600,000 to $1.5 million.
Following the 2018 election win by the Liberals, Premier Marshall made good on his promise, implementing the increased threshold effective 1 January 2019, at a time of low inflation and wage growth, where it has since remained.
Since then, South Australian businesses have been subjected to COVID-19, award wage increases of 2.5% in 2021, 4.6% in 2022, and 5.75% in 2023 (the highest in history), along with the highest inflation in generations, and the pandemic-induced economic fallout. As a result, many businesses are now subject to payroll tax for the first time.
In its submission to the state government earlier this year, the South Australian Business Chamber recommended the 2024 – 2025 budget include the following measures:
