Small businesses face $9000 payroll tax increase if budget is blocked over bank tax

SMALL businesses would be forced to pay up to an extra $9000 in payroll tax if the Budget Measures Bill is blocked in the Upper House.

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SMALL businesses would be forced to pay up to an extra $9000 in payroll tax if the Budget Measures Bill is blocked in the Upper House.

Treasurer Tom Koutsantonis has revealed that about 3000 small businesses could receive an arrears notice the next time they pay their tax.

Since July 1, businesses with payrolls between $600,000 and $1 million have been paying a tax rate of 2.5 per cent.

The drop from 4.95 per cent replaced a temporary small business payroll tax rebate, and was meant to lock in discounts of up to $9800 each year.

But if the Bill is voted down in parliament next week by Liberals and crossbenchers — a first in state history — to block the controversial state bank tax, Mr Koutsantonis warns that the new payroll tax rates to help eligible small businesses create jobs will be scrapped.

“If the Budget Bill is blocked, I’ll be writing to every South Australian small business and telling them it was Steven Marshall that slugged them with a payroll tax increase,” he said.

“Our Treasury officials have been charging local small businesses the new, reduced rate since the start of the financial year.

“If the Liberals block the Budget this week, the department will disregard those tax cuts and go back to charging the previous, higher rate.”

Tom Koutsantonis during Question Time. Picture: Dylan Coker

Last week, Opposition treasury spokesman Rob Lucas emphasised the Opposition was rejecting only the bank tax, and it was up to the Government if it wanted to scrap the remaining measures.

Business SA chief executive Nigel McBride said they again called upon the Weatherill Government to put the Budget through without the bank tax.

If it wasn’t, Mr McBride said it made the government’s stated support for small to medium businesses “very hollow indeed”.

“This is the ultimate cheap shot against small mum and dad employers who make up the backbone of our communities and suburbs,” he said.

“The bank tax is a small fraction of the overall budget ... it’s not hard for this government to find money when it wants to.

CEO of Business SA, Nigel McBride. Picture: Tricia Watkinson

Rob Lucas

“He (Tom Koutsantonis) doesn’t actually need to target small businesses this is again political leverage to continue to deflect the debate way from energy prices, blackouts, unemployment, flat population growth.”

Labor on Monday launches campaign ads targeting Opposition Leader Steven Marshall.

The “Marshall Mondays” campaign will involve a new ad every Monday for six weeks informing South Australians that Mr Marshall “represents a big risk to South Australia”.

Mr Koutsantonis said “Every time he (Steven Marshall) opens his mouth about something, he gets it wrong”.

“If you can’t get the basics right how can you fight for the state,” he said.

But Opposition Treasury spokesman Rob Lucas said Labor was out of touch.

“Every politician including Tom has made his fair share of blunders and mistakes,” he said.

“People are more concerned about struggling to pay their bills and struggling to get a job rather than whether someone got a word wrong in an interview four years ago,” he said.