Payroll, land tax cuts in bumper WA budget
Friday, May 9, 2008/
An improved payroll tax regime, lower land tax and a reduction in motor vehicle duties are among the benefits delivered to business in yesterday’s West Australian state budget.
Booming mining revenues – up 23% to $3.4 billion in 2008-09 – helped Treasurer Eric Ripper deliver a record $7.6 billion program of infrastructure spending and $238 million in tax cuts next year while maintaining a budget surplus of $1.8 billion.
For business owners, a range of changes to the state’s payroll tax regime such as degrouping of commonly owned business for calculation purposes, and streamlined lodgement procedures, will result in savings of almost $165 million over four years.
Other key changes for business owners include:
- Land tax payment thresholds have been lifted by an average 13%, 33% cuts in the two lowest tax brackets and a 17% cut in the Metropolitan Region Improvement Tax.
- A $5000 increase in motor vehicle duty thresholds has been brought forward a year to 1 July 2008.
- A lowering in stamp duty thresholds for residential property that will cut the tax paid on a median priced property by 15%.
Big ticket infrastructure items in the budget include $1.2 billion to upgrade electricity networks and $1.1 billion for water infrastructure including a new desalination plant in the state’s south.
The budget also highlights the strength of the West Australian economy in comparison to the rest of the nation. Economic growth topped 7.5% last year and, despite a slowdown in global economic growth and the credit squeeze, is expected to achieve strong 6.25% growth for 2008-09.
The Chamber of Commerce and Industry WA says the surge in revenue should have been used to deliver more substantial tax relief for business.
CCI WA chief executive James Pearson says the changes to payroll tax will only benefit 1% of WA’s 207,750 business.
“Genuine small businesses continue to be subject to a rising payroll tax bill as a result of strong wages growth in the state. The Treasurer’s failure to lower taxes means a WA small business can only employ 12 workers on average wages before being liable for payroll tax,” Pearson says.