Business Council statement on West Australian Budget

07 September 2017

We acknowledge the new government has inherited a difficult budget position, and they are clearly making a genuine effort to control spending.

We also commend the Treasurer for resisting misguided calls for a state bank tax, which would have further damaged the state's standing among investors.

However, this budget will still give larger companies reason to reconsider investing in job creation in WA.

Western Australia is crying out for new investment, and the announced payroll tax and gold royalty hikes will erode its competitive edge and undermine investor confidence.

Arbitrarily targeting some companies with higher payroll tax threatens to erode WA's competitiveness and drive jobs either interstate or overseas.

The idea that larger businesses can simply absorb additional costs is a myth. The cost always falls somewhere - employees who miss out on wage rises, consumers who pay more for products, super funds that miss dividends, and jobseekers who can't find work.

The Henry tax review found that payroll taxes levied on a subset of businesses acted as a barrier to business growth. Moreover, higher payroll tax rates imposed on some businesses will depress wages across the board.

Increasing the payroll tax gap will only serve to amplify the cost of these distortions on the WA economy and workers.



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