Payroll tax is crippling small business and is a big deterrent to
hiring more staff, according to Trevor Markham, managing
director of EIrecruit.
As NSW’s unemployment rate hits almost 7 per cent, there
is increased pressure on the Federal Government to relieve
small business of the tax on how many people they hire.
“The payroll tax doesn’t take into account your profits –
simply how many people you have on your books,” said
Markham. “It is a big disincentive to hire more office staff, for
example, which is not good when unemployment is growing.”
The NSW Business Chamber supported the urgent need
for the Federal Government to fund a 50 per cent payroll tax
concession across the entire country to take some of the
pressure off business operators.
“The sobering unemployment figures have confirmed what
we have been hearing from NSW businesses for months –
that they have been under immense pressure from the global
recession,” said Kevin MacDonald, CEO of NSW Business
According to MacDonald, a 50 per cent payroll tax holiday
for the next financial year (2009/10) across Australia could
save businesses in NSW approximately $3.5 billion.
“Payroll tax is a tax on jobs and that is the worst tax to
have in this environment,” he said. “NSW is leading the nation
in unemployment; we need to provide more targeted relief for
business if we have any hope of keeping a lid on
The ABS reported that unemployment in March jumped
0.5 per cent to 5.7 per cent and that there are now 103,000
more unemployed people than just two months ago.
The Australian Chamber of Commerce and Industry (ACCI)
has also called on the Australian Government to place the
issue of reducing payroll tax on the agenda of the Council of
Australian Governments (COAG) when heads of government
next meet on 30 April.
“This payroll tax penalises employment,” said Peter
Anderson, CEO of the ACCI. “Reducing the tax on jobs would
save jobs during this recession.”