Tasmania's ruling Liberal party has announced plans to cut payroll taxes for 2,600 state businesses, claiming the move could create 600 jobs.
Under the proposals, organisations paying between AUS$1.25 million (US$1 million) and AUS $2 million (US$1.6 million) in wages would have their payroll tax rate reduced from 6.1% to 4%.
According to The Examiner, companies paying wages of less than AUS$1.25 million will continue to be exempt from payroll tax, and those that pay above AUS$2 million will continue to pay 6.1%.
Treasurer Peter Gutwein attested that the move would save some businesses up to AUS$15,750 (US$12,511) a year. In addition, if a quarter of the state’s businesses receiving the cut took on at least one new staff member, he claimed that 600 new jobs would be created.
The initiative is expected to reduce payroll tax revenues by about AUS$8 million (US$6.39 million) a year.
Launceston Chamber of Commerce executive officer Neil Grose said the move would make a “reasonable difference” to the state’s small to medium-sized businesses as payroll tax was considered a deterrent to both employment and business growth. He added that he would be talking to the Labor Party about the proposals.
But economist Saul Eslake has criticised the idea, saying that concessions would be better off focused on new businesses rather than smaller ones.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
Tasmania's ruling Liberal party has announced plans to cut payroll taxes for 2,600 state businesses, claiming the move could create 600 jobs.
Under the proposals, organisations paying between AUS$1.25 million (US$1 million) and AUS $2 million (US$1.6 million) in wages would have their payroll tax rate reduced from 6.1% to 4%.
According to The Examiner, companies paying wages of less than AUS$1.25 million will continue to be exempt from payroll tax, and those that pay above AUS$2 million will continue to pay 6.1%.
Treasurer Peter Gutwein attested that the move would save some businesses up to AUS$15,750 (US$12,511) a year. In addition, if a quarter of the state’s businesses receiving the cut took on at least one new staff member, he claimed that 600 new jobs would be created.
The initiative is expected to reduce payroll tax revenues by about AUS$8 million (US$6.39 million) a year.
Launceston Chamber of Commerce executive officer Neil Grose said the move would make a “reasonable difference” to the state’s small to medium-sized businesses as payroll tax was considered a deterrent to both employment and business growth. He added that he would be talking to the Labor Party about the proposals.
But economist Saul Eslake has criticised the idea, saying that concessions would be better off focused on new businesses rather than smaller ones.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
