Opinion
Issue No. 26 - December/January 2005/06
Payroll tax is costing us jobs…
Bluey Johnson is the principal of Johnson Home Improvements, a metal fabrication business based in Port Pirie.
It’s a successful firm, and financially healthy, but Bluey has hit the roof over tax.
He feels that the State Government’s tax regime is holding his business back by stealth.
If you understand bracket creep you’ll know what Bluey is on about. His small business only recently began paying payroll tax.
Bluey’s payroll, relentlessly rising to match the wages environment — he is a considerate employer — has struck the $504,000 mark where payroll tax becomes payable.
“A boss and nine employees is a big business? If the Rann Government considers small business the backbone of the state’s economy, then he must want to break it,” he says, mincing no words.
“If they keep doing this they will send (small) businesses broke.
“Mr Rann, the State Bank debacle started this. How long do we have to pay for it?”
Bluey has made a study of payroll tax and has kept souvenirs of past legislation. The point he stresses is that the payroll tax threshold has increased only once in 13 years, under governments of both political stripes.
“From 1985 to 1992 the Labor government was handling payroll tax in a reasonable manner. The threshold went from $250,000 to $456,000,” he says.
“Then the State Bank fiasco sent the state broke. When the Liberals won power in 1993 they had no money so payroll tax suffered.
“The Liberals raised the threshold in 2001 by 10% from 456,000 to 504,000 and the percentage to be paid dropped from 6% to 5.7%.
“But having been so generous, they then said termination payments and fringe benefits were to be included in the threshold calculation. What a joke!
“When the Rann Government came to power in 2002 the state was cashed up and what do we get? The percentage is dropped from 5.75% to 5.5%.”
Bluey points out that i...
