Northern Territory: Lia Finocchiaro makes election promise to raise payroll tax threshold

If elected, the CLP are promising to ‘abolish’ payroll tax, with trainees’ wages also to be excluded if the opposition get their way. See the details and what one business owner had to say.

Chris O'Brien, Marie-Clare Boothby and Lia Finocchiaro.

Opposition leader Lia Finocchiaro has pledged to deliver Territorians the most generous payroll tax-free threshold in the country if elected.

If fulfilled, the promise would shift the payroll tax threshold in the Territory for the first time in 13 years.

On Wednesday, Ms Finocchiaro said the CLP would raise the current payroll tax-free threshold by $1 million and ensure trainee wages were not included.

“Under a CLP government we will abolish payroll tax for small businesses – this will mean that we will lift the payroll threshold from $1.5 million to $2.5 million and importantly, on top of that, we will also make sure that wages for apprentices and trainees are not included in that cap,” she said.

“This will give businesses the opportunity to grow, employ more staff and, importantly, incentivise them to put on more apprentices and trainees to grow our own local talent here in the Territory and keep them here.”

The elevation would mean Territorian employers with payrolls below $2.5 million would be exempt from paying payroll tax.

The Territory’s current payroll tax rate is 5.5 per cent.

Ms Finocchiaro said the decision was motivated by the “harder” circumstances experienced by small businesses.

“We recognise that payroll tax is nothing more than a handbrake and tax on creating more jobs for local Territorians,” she said.

“If we are going to reach a $40 billion economy, we need to be changing the rules of the game and the CLP’s plan of action on payroll tax to create more jobs and opportunities for small businesses is a game changer for the Territory.

“This change will also make us the most competitive place in the country to run a small business, having the highest payroll tax-free threshold of any other jurisdiction.”

Dreamedia Events managing director Chris O'Brien said his business would benefit from the payroll tax threshold being lifted.

Dreamedia Events managing director Chris O’Brien welcomed the announcement as a win for small businesses.

“What I’m hearing is brilliant for small businesses, anything that is going to support and underpin the Territory’s economy – you just don’t understand how challenging it is for Territorians to start a business through remoteness, freight, (and) labour,” he said.

“It is so challenging, so this is a brilliant step forward – I would challenge any accountant in the country to explain (the benefits of) payroll tax, so this is a great thing (that) I think every Territorian is going to be listening to this and hope it comes across the line.”

Mr O’Brien revealed his business had struggled to fill vacancies with homegrown talent and said he hoped payroll tax relief would alleviate financial pressures.

“When you train local and you buy local the benefits stay local.”

Chamber of Commerce NT chief executive Greg Ireland welcomed the pledge.

Chamber of Commerce NT chief executive said raising the payroll tax threshold would be an “instant win” for the Territory’s economy.

“For businesses, this will reduce the burden of ongoing costs and allow them to further invest – we’re particularly supportive of excluding apprentice and trainee wages too because it really unlocks the opportunity for local businesses to invest in their own employees,” he said.

“It’s well known we lose young people to opportunities elsewhere and we’re not getting enough people through on apprenticeships and this is a good way for businesses to put money towards a future workforce.”

Chief Minister Eva Lawler says opposition leader Lia Finocchiaro is “going silly”. Picture: Pema Tamang Pakhrin

Chief Minister Eva Lawler criticised the announcement and said the policy would cut revenue from the Territory.

“One of the things we’re hearing from the opposition is lots of spending at the moment and talking about cutting revenue to the Northern Territory,” she said.

“If the leader of the opposition is talking about reducing payroll (tax), that means a reduction of what? $50 million?”

Ms Lawler said the leader of the opposition had “gone silly”.

“So what services or what public servants are the opposition going to cut to cover for that? We’ve heard (Ms Finocchiaro) announce the new prison which is probably about $1 billion, we keep hearing these announcements,” she said.

“At this stage I think Lia is just going silly and making these big announcements that she’s just throwing out there.”