South Australia’s new Liberal Government has flagged changes to its flagship tax cut promise for small business, acknowledging its election promise may have had the perverse effect of discouraging some businesses from employing more people.
Their key policy unveiled during their February election campaign launch would see all businesses with a payroll of less than $1.5 million exempted from paying the payroll tax.
But this drew some concern from business groups and Labor, which pointed out the change would end the current system of “phasing in” the rate of payroll tax.
Under the new policy, a business with a payroll of $1,499,999 would pay $0 tax.
However, if the same business lifted its payroll by just a dollar, it would immediately incur a bill of $45,000.
Treasurer Rob Lucas today said the Government was working on a solution to resolve the problem, by phasing in the rate of payroll tax above the $1.5 million threshold.
“It was a reasonable issue that businesses raised with the Opposition prior to the election,” Mr Lucas said.
“It was a very difficult one for the Opposition to be able to model in terms of the costings.
“Now that you’ve got the full force of the Treasury behind you they’re able to do those sort of costings at the drop of the hat.
“So we’re certainly looking at that issue and we think we will have a good resolution to it when the bill is ultimately introduced to the Parliament.”
Mr Lucas said he was confident the cost of the policy change could be met within the envelope of the Liberals’ promise, costed at $44.5 million a year.
The Labor Opposition has declared it will support the payroll tax exemption, despite describing Mr Marshall’s election priorities as “tax cuts for millionaires”.
New Labor leader Peter Malinauskas said shadow cabinet’s decision to back the tax cut speaks to the way he would conduct himself in Opposition.
“If there are policies that are in the interests of working people or if there are policies that are in the interest of small business, we’ll work with them constructively,” he said.
Labor leader Peter Malinauskas says the party is open to “a bit of compromise” on trading hours. (ABC News: Leah MacLennan)
Labor flags backtrack on trading hour opposition
Mr Malinauskas has signalled Labor may be willing to relax Adelaide’s strict shopping hours on a Sunday morning, as the Government seeks cross-bench support for full trading hour deregulation.
The Opposition Leader met at Parliament House with a coalition of groups opposed to deregulated trading, including small retailers who are exempt from restriction, and the shop assistants’ union, which the Labor leader used to front.
“What I’ve heard this morning is a whole suite of compelling reasons around why deregulation of shop trading hours here in South Australia would hurt small businesses and would hurt working families,” Mr Malinauskas said after the meeting.
The Labor leader said his party would maintain its opposition to allow all retailers to open on public holidays, but was open to “a bit of compromise” on restrictions preventing major supermarkets and other retailers opening before 11am on a Sunday.
“If there was to be a compromise in this area, or a concession it would be around Sunday mornings from 9-11. But that is it,” he said.
Treasurer Rob Lucas dismissed Labor’s concession on trading hours as a “token effort”.
“Peter Malinauskas in particular knows it’s a weak spot for him,” Mr Lucas said.
“He’s a former shoppies’ union boss.
“They give huge amounts of money to the Labor Party.
“And yet they’re dictating on a policy which the vast majority of people want to see movement on.”
As a union leader, Mr Malinauskas brokered a deal with business which allowed shops in the Adelaide CBD to open on public holidays in return for two new part-day public holidays on Christmas Eve and New Years’ Eve.
Mr Lucas said the Labor leader’s position to oppose public holiday trading in suburban shopping centres was hypocritical.
“Where is their argument in relation to the families and people who work in the CBD on exactly the same day?” he said.
“Why are the families in the CBD or in Glenelg or in the regional areas any different to the families in Marion or Tea Tree Plaza?”
Mr Lucas said the Liberal Government would negotiate with key crossbenchers in the hope of winning support for complete deregulation when parliament resumes next month.