Business SA backs tax cut for regional companies

·2-min read

Payroll tax discounts for regional businesses should be included in the upcoming South Australian budget, the state's peak business group says.

In a submission ahead of SA's latest financial blueprint, the organisation said regional companies should get a 50 per cent discount to ease costs and help them compete.

Business SA's General Manager of Policy and Advocacy Kendall Crowe said payroll tax was one of the most constraining state-based taxes.

"We want to see our state's regional businesses flourish. Payroll tax is a significant hindrance to growing and operating a small business," he said.

While SA adjusted payroll tax thresholds in 2019, businesses with a turnover of more than $1.7m still pay the same rate they did in 2009.

Since then Victoria, NSW, the Northern Territory, and Tasmania have all lowered their general payroll tax rates, and both Victoria and Queensland introduced regional discounts.

Mr Crowe said that meant a business operating in Mount Gambier, in SA's southeast, could pay more than three times the amount of payroll tax than a competitor located 20 kilometres away and across the Victorian border.

"Such a difference in payroll tax rates means regional South Australian businesses, particularly along the Victorian border are significantly less competitive," he said.

"Introducing a 50 per cent discount on regional payroll tax would reduce this disparity and not only help these businesses to grow, but also attract new businesses and investment in the regions."

Under the Business SA proposal, a company would qualify for the discount if the principal place of business was in a regional area and if at least 85 per cent of its staff lived and worked in the area.

It estimated the discounts could help more than 700 regional enterprises.

The SA budget will be handed down next month.