Payroll tax

THERE ARE mixed blessings in the federal and state government budgets. The underlying theme in the state budgets, however, is good news in that most are investing in tourism. They understand that building visitation is good for local economies as every tourist spends on food and beverages, which creates employment. That employment growth also brings with it more taxes (in the case of the states, that dreaded payroll tax), which is good for their bottom line as well.

In some cases—VIC, NSW and SA—there have been positive reductions in the payroll tax collection. While in the case of SA the rate has been lowered, the best change for us is a lifting of the threshold. This is the most beneficial type of change for the restaurant, café and catering sector as it lifts additional businesses out of the payroll tax net.

In a recent report on creating additional employment in small business, the House of Representative’s Standing Committee on Education and Employment recommended boosting “employment and business productivity by reducing state and territory governments’ reliance on payroll tax as a form of revenue”.

That’s a pretty strong admission that payroll tax affects employment.

With more or less full employment right now, governments do not really focus on employment as an issue so I doubt we will see really meaningful payroll tax reform any time soon.

John Hart, CEO
Restaurant & Catering Australia

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