SMALL businesses throughout Tasmania are calling for more tax relief as measures announced by the state government in May fall short of expectations.
Small Business Council executive officer Robert Mallett will write to Premier Lara Giddings proposing labour hire companies be exempt from payroll tax.
Mr Mallett said the additional charges were passed on to small businesses that would otherwise be exempt if they employed someone directly.
Many small businesses use labour hire and recruitment firms to employ staff during busy periods or to test out if they need a permanent extra staff member.
Using a third party saves business owners the administrative burden and risks associated with employing new staff directly.
Mr Mallett said exempting labour hire companies from payroll tax could be done in the short-term while more needed to be done to make it easier for companies to hire their first employee.
``There are 20,000 small businesses that don't employ anyone. It could well be that lots more business would take the plunge if the compliance burden was not so daunting,'' Mr Mallett said.
Finance Minister Scott Bacon said the government had no further plans to change the payroll tax system but would consider any measures to support jobs in Tasmania.
Mr Bacon also defended the impact of the increase in the tax free threshold announced in May.
While 2250 businesses could save up to $14,600, treasury budget figures reveal the average benefit will be less than a third of that.
Only $10 million is budgeted in lost revenue for this financial year as a result of the increase from $1 million to $1.25 million, rather than the $32 million a year that would be lost if all eligible businesses claimed the full amount.
Mr Bacon said under the jobs package, any new jobs created were exempt from payroll tax.
``Around 200 employers have already registered for the payroll incentive scheme, which shows improved business confidence,'' Mr Bacon said.
Liberal treasury spokesman Peter Gutwein said Tasmania had the highest rate of payroll tax of all the states.
``The payroll tax changes that Labor and the Greens announced in the last budget were too little, too late,'' Mr Gutwein said.