Victorian Government fails mum-and-dad small businesses on payroll tax

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2 November 2017

Master Electricians has today slammed the decision by the Andrews Government in Victoria for failing to extend payroll tax relief to mum-and-dad small business owners.

Earlier today the Victorian Government announced that it will introduce to Parliament the Payroll Tax Act 2007 that would exempt Group Training Organisations (GTOs) that are run as for-profit from paying payroll tax on apprentice and trainee wages.

MEA Manager for Advisory Services Jason O’Dwyer said that by failing to offer the same exemption to small business was just another kick in the teeth for those operating in the private sector.

“The Andrews Government has once again demonstrated that it does not understand small business or the important role they play in creating apprenticeships,” Mr O’Dwyer said.

“Small business who offer direct employment are slugged with a payroll tax, while union-run and full for profit GTOs get a free ride from having to pay this burdensome tax.

Mr O’Dwyer said that the payroll tax burden faced by small business is compounded given the already low threshold for the tax in Victoria.

“Victoria currently has the lowest payroll tax threshold of any state in Australia and today’s announcement means that small business will not only continue to operate in a high-taxing and restrictive environment, but now also on an un-level playing field with GTOs,” Mr O’Dwyer said.

“In Victoria the threshold for electrical contractors for paying payroll tax on apprentices is at $525,000/year, compared with a threshold of $750,000/year in NSW, $1.1 million/year in Queensland, and $1.2 million/year in Tasmania.

“The current payroll tax system in Victoria is restrictive, confusing and as of today will now disadvantage employers who directly hire apprentices.

“The private sector creates in excess of 80% of opportunities for apprentices, but will now be forced to operate on a tougher playing field than GTOs.

“According to NCVER data for the 2017 March Quarter, in Victoria the private sector accounted for 39,800 apprentices in training, while GTOs only accounted for a mere 3,305 in training.

“MEA is calling on the Victorian Government to stop knee-capping mum-and-dad small business owners and to extend the payroll tax exemption to small business.”

Jason O’Dwyer is available for interview.
Contact The SAS Group on (07) 3221 9222 or 0408 612 603.