News & Events

Liberal Party Opposes Payroll Tax changes in support of Business

19 April 2018

Senator Dean Smith


The Western Australian Liberal Opposition does not support the McGowan Labor Government’s proposed amendments to payroll tax exemptions for Trainees.

The primary argument put forward by the Labor Government is that businesses are currently “rorting" the system and as a result, exemptions in WA are much higher than any other state in Australia.

We have challenged the Government on the following basis:

  1. The percentage of workforce in either traineeships or apprenticeships has been declining over the past 6 years from approximately 3.5% to 2.5%.
  2. Following amendments by the Former Liberal Government, exemptions have fallen from a peak of $90m in 2015/16 to $80m dealing with inappropriate behaviour of individual businesses
  3. After exemptions, Western Australian employers pays 30% more payroll tax per employee ($2408) compared with the average across the rest of Australia ($1839)

Removing these exemptions is only going to increase the payroll tax paid by Western Australian employers who are already doing it tough in these difficult economic times.

The amendments debated in the Legislative Assembly last week specifically remove payroll tax exemptions for existing employee traineeships. Given Western Australia’s economy is shifting from a construction boom to production and that other industries are facing change through disruptive technologies, now is the time we should be supporting Western Australian businesses to re-skill and prepare for the future. 

The McGowan Government claims that all monies saved will be put back into training. They have failed, however, to articulate how that will be done other than flag that they are considering a Grants Scheme. Given Labor’s recent $39m Local Projects Local Jobs Grants programme was shown to be nothing more than a heavily politicised “slush fund”, the Liberal Party remains concerned that a Grant scheme for employee training will be at risk of interference from Unions and/or politicised by the McGowan Labor Government.

We believe that Western Australian businesses are best placed to determine the training requirements of its workforce and suggestions that either The Labor Government, Public Servants and/or others know best would be both arrogant and misguided.

Individual businesses are best placed to deliver productivity improvements and a more efficient and effective workforce.

We are not opposed to tax reform but will only support those that improve the outcome for Western Australian businesses without unnecessarily increasing the burden of red tape and further bureaucracy. If the McGowan Government was serious about retaining the savings for training purposes, surely, they would identify the new program before removing the current scheme. We think this initiative is Treasury driven and is more of a tax grab to fund black holes being created by McGowan’s spending.

For these reasons, we are opposing this legislation in the Parliament.


- Dean Nalder MLA, Shadow Treasurer; Shadow Minister for Finance; Energy