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Payroll tax relief identified as key election issue by WA businesses, CCIWA survey reveals

Inflation-battered WA business have put payroll tax relief on the agenda as a key election issue while they continue their desperate fight for survival. As rising costs put expansion plans on hold, payroll tax relief was identified as the top priority by the majority of small and medium businesses surveyed by the Chamber of Commerce and Industry WA. The CCIWA said a “two-speed economy” was holding some businesses back and sending many to the wall with insolvency rates hitting a record high. “Overall, (the economy) is in good shape because of the strength of larger businesses . . . but it’s a vastly different story for many small and family businesses who have been battered by rising costs,” CCIWA chief economist Aaron Morey said. “In many cases, these businesses are also being hit with the highest payroll tax in the nation. “Those businesses have told us they’re deeply concerned about having to pay this regressive tax, so they’re staying small. “Not expanding their services, hiring new staff or chasing new innovation.” The CCIWA survey found 40 per cent of businesses were bracing for economic conditions to weaken over the next three months, with only 24 per cent optimistic of improvement. It only increased marginally, to 29 per cent of businesses which expected conditions to improve over the next year. Co-founder of Perth meal-kit business ‘This Little Pig Went To Market’, Katherine Roberts, described 2024 as the most challenging year yet due to the combined impact of WA’s plastic ban, a minimum wage increase and surging supply costs. “The price of olive oil tripled within a month and it became completely unavailable,” she said. “For the staff who work for us, their cost of living has gone up but at the same time all our food costs and all our expenses have gone up. “So it it’s really challenging, because they’re feeling it as much as our customers. “It’s been hugely stressful and quite emotionally-charged.” The WA-owned and operated business was established in 2013 and expanded this year, “pivoting” into new areas to balance the books and reduce operating costs. “Being a premium-priced product we recognise that future price rises would be quite difficult to pass onto the customers,” Ms Roberts said. “However I think it’s made us quite creative, looking at our internal processes and seeing what we can do to create efficiencies with how we work.” They branched out into local wine, research and collaboration with other businesses. Ms Roberts said the single-use plastic ban that came into effect in August brought packaging to a “standstill”. However, it eventually became a positive. “Packaging companies were saying ‘look we’ve got these bio containers’ but they were leaking and they were melting . . . so we found that very difficult,” she said. “But it forced us to think differently and resulted in a better outcome. “We saved over $10,000 a year moving from plastic containers to brown bags for all our dry ingredients.” Ms Roberts is nervously optimistic about 2025 but said a $120,000 PAYG bill for 34 staff was a barrier to hiring more workers. “We’re definitely hesitant when we’re looking at hiring staff,” she said. “(Payroll tax) would be a massive difference, that would be the biggest help. “It’s food and wages where all our money goes, so if there’s any relief in either of those areas and just supporting small businesses . . . because it takes so much work.” State Budget papers forecast WA’s payroll tax take to grow by 6.5 per cent to $5.8 billion in 2024-25 — and exceed $6 billion in 2025-26. Treasurer Rita Saffioti is closely guarding the numbers contained in the State Government’s economic mid-year review that is due to be delivered before Christmas. At a press conference on Monday, she would not respond to questions about a potential war chest for pre-election sweeteners. “Mid year review when it’s released will have all the details of what’s in it and we’ll inform you of that date once we confirm it,” Ms Saffioti said. She said the State Budget remains in the black, despite the Federal Government flagging a $100 billion write-down in forecast mining exports. “We budgeted conservatively when it came to iron ore royalties,” Ms Saffioti said. “Lithium, of course, has really been hit over the past year in relation to prices, we had some write downs of lithium royalties in the Budget. “But our domestic economy continues to be very, very strong.” Rising operating costs, labour shortages, compliance requirements and a lack of worker housing were listed as the other biggest barriers to growth in the CCIWA survey. Almost 70 per cent of businesses reported they have struggled to fill vacancies. That figure increased to 85 per cent in the retail trade sector. ‘This Little Pig Went To Market’ is still hoping to expand but Ms Roberts said it was becoming harder to match supply costs with customer demand. “People just aren’t willing to pay what it costs to produce artisan products,” she said. “I think this coming year will rely on the wider community, the people of Perth, continuing to value locally-owned small businesses who are trying to support other local businesses and delivering convenience. “It’s easy to shop at the big supermarkets or online but if people don’t support local businesses it’s going to be a very sad landscape.”

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Payroll tax relief identified as key election issue by WA businesses, CCIWA survey reveals

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Payroll tax relief identified as key election issue by WA businesses, CCIWA survey reveals