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Payroll tax rise


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STIRLING business leaders believe the WA Liberal Party’s plans to raise the payroll tax threshold will have little impact on small business.

If re-elected, the Liberal Government will raise the payroll tax threshold from its current limit of $750,000 to $800,000 in 2014-15 and $850,000 in 2016-17, with Treasurer Troy Buswell claiming that more than half of WA businesses will either pay no payroll tax or have their liability substantially reduced.

Currently, small business owners are taxed if the combined pay of their employees is over $750,000.

Stirling Small Business Centre (SBC) chief executive Evan MacRae, told the Times last Wednesday that payroll tax stifled small business and that the changes did not go far enough.

“Payroll tax is one of the worst, most insidious, horrible taxes ever invented that prevents businesses from growing,” he said.

“In my opinion, (raising the tax threshold) it doesn’t go anywhere near far enough because of bracket creep and the constant growth of wages.

“It will be gobbled up before it has even been implemented. It will do nothing at all for small business.”

Combined Small Business Alliance (COSBA) of WA vice-president and Liberal Party member Rod Henderson said that while an increase to $850,000 was a ‘good start’, it fell far short of what COSBA had been lobbying for.

“We’ve been pursuing the Government relentlessly since they came to power on this, and we’re of the view that it needs to be moved to a point where it doesn’t impact small business at all, and that would be somewhere between $5 and $10 million gross,” Mr Henderson said.

“We argued that if there’s a starting point, $1.5 million would be acceptable but we’d prefer to see that moved up.

“The 800 or ultimately 850 (thousand) that is being proposed is short of the mark indeed of what COSBA has been pursuing the government for.

“All in all, I’d give the State Government a tick for what they’ve done for small business with the payroll tax but they’ve got more work to do.”

WA Labor, however, has confirmed that if they win the next election, no changes would be made to the current payroll tax threshold.

Meanwhile, Commerce Minister Simon O'Brien visited the Small Business Centre Stirling on Thursday to announce continued funding of $15m over four years, an increase of $1m, for the State's 25 SBCs.

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What everyone else is thinking

Gavin R. Putland


The last sentence was unexpectedly truncated. It should read:

Payroll tax should therefore be paid "UNDER PROTEST" to maximize the chances of recovering the payments if the tax is struck down by the High Court.

Gavin R. Putland


Presumably you mean "Payroll tax THRESHOLD rise". But that's not enough if payroll tax is UNCONSTITUTIONAL. Under s.90 of the Constitution, only the Federal Parliament can impose "excise" duties. If an excise is "an inland tax on a step in production, manufacture, sale or distribution of goods", as held by the majority of the High Court in Ha v. NSW (1997), then paying the workers is such a step. If "A State tax which fell selectively upon goods manufactured or produced in that State would be an excise duty", as held by the minority, then a domestic payroll tax is indeed selective in that way, because it falls on the labour content of local goods but not imported goods. By either definition, payroll tax is unconstitutional in its effects on goods, which are not undone by its effects on services and real estate. Payroll tax should therefore be paid "UNDER PROTEST" to maximize the chances of recovering the payments if the tax is struck do

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