Opposition Leader Steven Marshall launches campaign with pledge to scrap payroll tax for businesses with under $1.5 million in wages

OPPOSITION Leader Steven Marshall has pledged to abolish payroll tax for small businesses, in a $45 million jobs salvo fired at his official state election campaign launch on Sunday.

• Payroll tax respite to feature in 2017 SA Budget

OPPOSITION Leader Steven Marshall has pledged to abolish payroll tax for small business as the Liberals officially kicked off their campaign to seize power at next month’s state election.

Mr Marshall was joined by Prime Minister Malcolm Turnbull to launch the policy, and a new campaign manifesto, to party faithful at Surf Life Saving SA’s West Beach headquarters.

The Liberals have pledged to lift the point at which businesses are first hit with payroll tax from a total wages bill of $600,000 or above, where it stands at today, to $1.5 million.

They say that means 3500 small businesses that currently pay the tax will now no longer have to, in addition to about 3000 that already fall under the current limit.

Mr Marshall said the change would cost the State Budget $44.5 million per year and come into force from January 1. He said the Liberals would release a full costings document showing how they would pay for campaign promises in the final week before the March 17 poll.

The Liberals also unveiled a new slogan for the campaign, which claims they offer SA “a strong plan for real change” focused on cutting costs for employers and households.

Mr Turnbull said this election was critical for SA, and the State Government had “failed to provide any economic leadership at all” as it lurched from “one press release to another”.

He also continued the war of words with Premier Jay Weatherill on energy, saying SA had conducted a “reckless experiment” which delivered the highest prices and least reliability.

“They placed all their reliance in wind,” Mr Turnbull said.

“But they overlooked the minor detail, to them, that wind doesn’t blow all the time. They left the state vulnerable and reliable on a long extension cord into the Latrobe Valley (in Victoria) where ... all of the electricity is being generated by burning brown coal. It has been a combination of ideology and idiocy.”

Mr Marshall said cutting payroll tax would allow employers to create more jobs, and pledged the Liberals would not introduce any new taxes if it formed government.

“The choices are really clear,” Mr Marshall said. “More of the same (with) Labor’s failed policies, a lack of substance from (SA Best Leader) Nick Xenophon or the Liberal Party which has a strong plan for real change. That’s what we’re offering the people of SA.”

The tax plan has not been submitted to the new Parliamentary Budget Advisory Service, set up in December as part of Labor’s minority government deal with independent MP Geoff Brock.

Mr Marshall said he feared the PBAS’ work would leak to the Government, and the Liberals would have their costings independently audited before release. He said savings measures to fund promises would include cutting taxpayer-funded advertising and other “waste”.

Mr Weatherill said Labor wanted to put “money in the pockets of householders”, while the Liberals planned to enrich business. “Our approach is to invest in partnership with businesses to create jobs, rather than throw money at them and hope,” he said.

Mr Xenophon said the Liberals’ payroll tax plan was “a sensible, smart measure”.

SA’s top rate of payroll tax is lower than other states but the threshold at which it is first paid is one of the lowest. The Government delivered major tax reform in 2015, eliminating stamp duty for businesses buying properties. In recent budgets, it has given payroll tax concessions.

Policy police

What? The Liberals have promised to eliminate payroll tax for businesses with a total wage bill of $1.5 million or less. Currently, that threshold is $600,000.

How? At a stated annual cost of $44.5 million per year, to begin at the start of 2019.

Pub test? Standard economic theory says lowering the cost of employment will lead to more jobs being created, but the Liberals have not produced modelling showing how many it expects for the cost. Would likely get crossbench Upper House support to become law.

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