Labor’s plan to axe the lifting of the payroll tax threshold will penalise hundreds of small businesses in the Hunter region and discourage employers from putting on new staff, Hunter Business Chamber CEO Bob Hawes said this week.

The state’s peak business organisation, the NSW Business Chamber, has slammed a statement this week by NSW Opposition Leader Michael Daley that, if elected next March, he will renege on the promised lifting of the payroll tax threshold for small businesses across NSW.

The NSW Government committed in the 2018-19 State Budget to lifting payroll tax from  $750,000 to $1 million by 2021-22, following strong advocacy from the Chamber.

“There are currently over 400 small businesses in the Hunter that won’t receive the promised payroll tax relief if a future Labor government reneges on the Budget commitment,” Mr Hawes said.

“These are typically local businesses run by owner operators with around 10 to 12 full-time-equivalent staff on the average wage. It might be a partnership of three or four professionals supported by a small number of administrative staff, a light industrial firm, or a family restaurant with half a dozen permanent employees and a roster of casuals and part-timers.

“Payroll tax, particularly for those businesses sitting close to the threshold, penalises a business for taking on additional employees, while also increasing compliance costs by around $10,000 per year.

“Lifting the payroll tax threshold progressively to $1 million will keep 5,000 business across NSW out of the payroll tax system and save them $10,000 in annual red tape costs.”

“Mr Daley’s announcement creates confusion and uncertainty, and it means that decisions about adding to the workforce will be put off, at a time when many young job seekers are looking for their first job.

“We need to lock in the promised payroll tax reforms that support small business and employment growth, particularly in regional NSW.”