Victoria’s payroll tax threshold is the second lowest of all Australian states and territories and puts Victorian businesses at a major competitive disadvantage, says the Victorian Automobile Chamber of Commerce (VACC).
“An increase in the threshold would work to encourage more capital investment and employment opportunities across the state,” said VACC Chief Executive Officer, Geoff Gwilym.
“The current threshold puts Victorian businesses at an economic disadvantage and serves as a disincentive to employing more staff.”
VACC recommends the Victorian payroll threshold be competitively aligned with New South Wales ($750,000), Western Australia ($850,000) and Queensland ($1.1 million). Smaller states and territories such as the Australian Capital Territory (ACT), Tasmania and the Northern Territory have thresholds well in excess of $1 million.
The ACT, which has a payroll tax threshold of $2 million, recorded the highest percentage growth in business counts nationally (4.5 per cent) in 2016/17.
VACC recommends that Victoria’s payroll tax threshold should be lifted, at a minimum to $850,000, to ensure Victoria remains a competitive place in which to do business. Having business-friendly policies works in favour of all Victorians.
“Victoria is home to over 590,000 businesses, of which almost 18,000 relate to the automotive industry. The next Victorian State Government must raise the payroll tax threshold. If it doesn’t many businesses will close shop,” said Mr Gwilym.
Download VACC’s complete election manifesto Better Business. Better Victoria.