Flat White

When South Australia is the economic pacesetter, you know things are bad

12 February 2019

6:48 PM

12 February 2019

6:48 PM

Payday is one of the most joyous reoccurring occasions of life which has somehow managed to escape being narrated by Sir David Attenborough. Although, if it were to be recorded by the charismatic biologist, I imagine the picturesque event would go something like this:

Here we have the quintessential New South Welshman. Notice how he delights in opening his pay cheque and seeing how much money he will be receiving for his past fortnight’s labour. Now watch as he scoffs at the amount of income tax that is eating it away. Just imagine if he knew of all the other hidden taxes that are there. His defence mechanisms would kick in and he would flare up like a frilled neck lizard…

Hidden taxes are camouflaged taxes that blend into everyday life and the business environment. Payroll tax is one of these vicious vipers hidden from employees’ paycheques. It strikes New South Wales workers ferociously with a 5.45 per cent premium on their labour when the total combined labour cost for all employees in the business exceeds $850,000. This means the state government is gobbling up more money and inevitably using the money as a slush fund to buy more votes through reckless pork barrelling programs.

The carnage does not stop there. This tax leaves our economic environment in despair as it raises the price of goods along with the cost of living. Furthermore, it handicaps Australian businesses rendering huge disadvantages for them to adequately compete in the jungle that is the international marketplace, as other countries do not implement such vexatious taxes.

It also means businesses migrating into Australia are encouraged to base their operations in other states like Victoria, which while it also has a payroll tax dwelling in its habitat, it is far less ferocious with a rate that only bites at 2.45 per cent in rural areas.

Surprisingly, other states should act as inspiration for the state that holds Australia’s business capital.

Even South Australia serves as a practical example to NSW after an economic kick following the adjustment of payroll tax to affect fewer people; a starting point of $1.5 million. According to the December Quarter 2018 Sensis Business Index Report released on last Tuesday, this led to an eight-year high in business confidence, with both wage growth and business sales up 15 points.

There is some hope. The current NSW Liberal Government is planning to follow their SA cousins’ line by raising the payroll tax threshold to $1 million by 2021-22.

Nevertheless, such a promise has led the NSW Labor Party buffoons to flip flop on their promise to abolish payroll tax for the far West of the state and instead admitting they are going to increase the tax on small businesses.

This has left the Western New South Wales Business Chamber in Dubbo questioning Labor’s decision, resulting in the creation of an online petition to, “Stop the Slug Tax on Jobs”.

The Australian Taxpayers Alliance has also arrived at a similar proposal to save the economic environment. However, the Australian Taxpayers Alliance has decided to focus on lobbying on behalf of all states to kill the deadly viper once for all and “Axe the Payroll Tax”.

It is vital for people to know this is not an issue of ‘left vs right’. It is an issue paramount to the survival of our Australian economic ecosystem.

Louis Williams is a Research Associate at the Australian Taxpayers’ Alliance.

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