Payroll tax scrapped for trainees and apprentices for two years if Liberals re-elected

Payroll tax would be removed on all trainees and apprentices for two years, saving employers an estimated $18.2 million, if the Liberal government is re-elected next month.

Payroll tax would be removed on all trainees and apprentices for two years, saving employers an estimated $18.2 million, if the Liberal government is re-elected next month.

Premier Steven Marshall, who made the announcement on Monday morning, said the commitment was part of a broader effort to grow the state’s skilled workforce.

“In the past four years, huge numbers of business owners and employers throughout South Australia have taken on new apprentices – many for the first time,” he said.

The pledge is an expansion of an existing, temporary scheme.

In 2020, the government announced payroll tax on apprentices would be temporarily cut to help employers weather the economic impacts of Covid.

As the effects of the pandemic continued, that scheme was extended into 2021.

Under Mr Marshall’s election promise, made on the third official day of the campaign, the two-year exemption would be applied to wages paid to trainees and apprentices who take-up a contract between July 2022 and June 2024.

“We want to make sure that we don’t have skill deficiencies across South Australia, we want to make it even more attractive to take on an apprentice or trainee in South Australia,” he said.

“It’s a key part of the transformation of the economy which has been occurring over the last four years.”

In the 2010-11 Budget, payroll tax on apprenticeships and traineeships was scrapped by then-Treasurer Kevin Foley.

However, just two years later in the the 2012-13 Budget, then-Treasurer Jack Snelling reintroduced the measure because of concerns the tax break was being rorted with businesses claiming that employees were trainees when they were not.

Mr Marshall denied there would be a risk the scheme could prompt employers to reclassify existing employees as trainees in order to claim the exemption.

He made the announcement at the Sarah Constructions building site of Cancer Council SA’s new integrated cancer building on Greenhill Road.

Sarah chief executive Adrian Esplin said the initiative would help attract more workers to the industry.

“Any incentive to get apprentices and more people involved and a greater participation rate we welcome,” he said.

Master Builders SA chief executive Will Frogley also welcomed the announcement, which he said was one of a range of incentives on offer to hire apprentices.

Business SA chief executive Martin Haese said the temporary scheme had already proven valuable in increasing the take-up of apprenticeships, and a permanent exemption would help reduce youth unemployment and upskill South Australians.

Asked whether he would match the promise, Opposition Leader Peter Malinauskas said he had not seen the cost of the plan and was instead focused on “fixing the ramping crisis”.