Big employers hit in $435m WA tax grab

Some of the nation’s biggest employers will be hit with an extra $435m in payroll taxes in Western Australia.

Liberal leader Mike Nahan said the affected companies were “surprisingly silent” on the payroll tax rise. (AAP Image/Richard Wainwright)

Some of the nation’s biggest employers — led by Wesfarmers, BHP Billiton and Rio Tinto — will be hit with an extra $435 million in payroll taxes in Western Australia after the state’s Liberal Party decided not to block Labor’s key budget repair measure.

Liberal leader Mike Nahan revealed today that big business had not lobbied him or his MPs to block the measure, in stark contrast to a strong campaign by the goldmining industry to oppose the McGowan government’s planned $390m gold royalty hike, which was killed off last week.

He said the affected companies were “surprisingly silent” on the payroll tax rise, despite claims by the WA Chamber of Commerce and Industry that the additional impost would cost more than 1300 jobs in the first year alone.

It is understood that WA’s big iron ore miners, including BHP, Rio and Fortescue Metals Group, will contribute around 20 per cent of the $435m in additional payroll tax over four years from 2018-19.

The resources sector as a whole will contribute more than one-third of the extra revenue.

The government says only the largest businesses will be affected by the change, representing less than 1 per cent of all businesses operating in WA.

From July next year, companies with an Australia-wide payroll of more than $100m will face a tax rate of 6 per cent — up from 5.5 per cent. For businesses with a payroll of more than $1.5 billion the rate will jump from 5.5 per cent to 6.5 per cent.

The Liberals were able to decide the fate of the measure after the Nationals and key crossbenchers said they would oppose it in the Legislative Council.

The Labor Party does not have a working majority in the upper house

Dr Nahan said the Liberal Party’s decision to allow the hike was swayed by the fact that it would only affect large companies.

He said the gold royalty rise would have had a bigger impact on jobs.