Payroll tax cuts to benefit businesses

Shadow treasurer Michael O’Brien delivered the news in Warragul on Wednesday, announcing a Liberal Nationals state government would cut the current payroll tax rate of 2.45 per cent for qualifying regional businesses to just one per cent.

The policy, designed to increase job growth in regional areas, is expected to save businesses an average $11,633 a year.

Warragul based agricultural contractor and businessman Duncan McNeil welcomed the news, after telling Mr O’Brien his business had paid $82,000 in payroll tax over the past four years.

Mr McNeil, who employs eight full time drivers, office staff and casual staff, said he had never not put on staff because of payroll tax, but it “certainly eats into profits.”

He said the government should be encouraging businesses to grow and employ people.

Mr McNeil said there were years when the business lost money, but they still employed people and paid payroll tax.

Member for Narracan Gary Blackwood said local businesses had been doing it tough under the current government and the opposition wanted to deliver this cut to payroll tax to ease some of the pressure.

“Regional businesses I have spoken to regularly tell me that payroll tax is stifling their ability to invest more in their day to day operation.

“Our policy to cut payroll tax for regional businesses will deliver greater financial flexibility so that they can reinvest in infrastructure, assets and their employees to grow their enterprise and improve their viability long term,” he said.

Mr O’Brien said about 4000 regional businesses qualified for the concessional payroll tax rate.

He described payroll tax as a tax on jobs that had seen Victoria become the highest tax state in the country.

He said the one per cent payroll tax rate would be the lowest in the country.

Mr O’Brien said slashing payroll tax would provide more incentives to create jobs and decentralise growth.