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PAYROLL TAX AND THE IMPACT ON JOBS

A tax that is paid or is payable by an employer for employing workers in Australia… great idea!

Queensland Senator Gerard Rennick has been quoted this year calling payroll tax a “dumb tax”. Thank you Senator, I could not agree more.

He goes on to say “Take a farmer, for example, has as a 20 million dollar turnover employs 500 people to pick the fruit to get that turnover, he will pay payroll tax. On the other hand, you can take and export that fruit so we’re taxing someone that employs people and exports.

“On the other hand, you can have a car dealer that might sell 20 Ferraris for 20 million dollars a year, but only needs three people and doesn’t pay payroll tax, so where’s the logic, it’s just a silly tax”

During the pandemic we have had some States waive the payroll tax for a period, but wouldn’t it make more business sense to completely remove the tax? It would take the pressure off business owners and make running a business cheaper. The result, therefore, would most likely lead to growth and an increase in employment opportunities.

The unemployment rate rose to 7.4 percent in June 2020, a 21-year high. Australia is in a desperate need to boost the job market NOW. The Treasury prediction is for unemployment to increase to around 8 percent in the September quarter 2020, and to rise again in the December quarter to above 9 percent.

The payroll tax is a disincentive for business owners and may prevent job openings. Removing payroll tax on businesses will deliver owners a little more confidence, it will help reduce the administrative and financial burden, but most importantly it will make it easier to employ.

By Andre Elcham 14/08/2020

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