Payroll tax cut ‘a game changer’

TAX CHANGE: TCCI's Michael Bailey, Gradco chief executive Oliver Diprose and Treasurer Peter Gutwein at St Leonards.
TAX CHANGE: TCCI's Michael Bailey, Gradco chief executive Oliver Diprose and Treasurer Peter Gutwein at St Leonards.

A new payroll tax incentive for businesses to employ young people across Tasmania has been welcomed by key industry stakeholders.

On Saturday the state government announced that from July 1 if a business that pays payroll tax employs a new apprentice or trainee, payroll tax relief will be available on that new position for two years.

In addition if a business employs a young Tasmanian aged between 15 and 24 who is not a trainee or an apprentice, the employer will be eligible for payroll tax relief for up to 12 months.

Tasmania Chamber of Commerce’s chief executive Michael Bailey said it was exciting to try the payroll tax idea when the economy was growing and not in decline.

“It makes it easier for business to invest in apprentices and trainees to grow their capacity and the capacity of the Tasmanian economy,” he said.

“We know that underemployment has been a growing concern and this is a way to secure full-time employment for people and also give them the skills to have ongoing careers.”

Gradco chief executive Oliver Diprose, who employs about 140 workers including a dozen trainees and apprentices at St Leonards, said the change would have a big impact.

The company employs mechanics, boiler-maker welders, and trainees in civil construction.

“Labor is the biggest cost in our business so any relief that we can get around payroll tax or any tax is a benefit to our business,” Mr Diprose said. “It gives us the opportunity to put new people on … for every new person we put on, payroll tax is another six per cent on top of their wage every year.”

He said encouraging young people to learn the skills was very important for the company’s longevity, with a number of older workers in the business. 

Treasurer Peter Gutwein said the government would include the payroll tax relief in the budget to be delivered next week and hoped to support about 6,500 jobs.

“This is available to any business that is in the payroll tax net, that’s around 2500 businesses that in Tasmania employ slightly more than half of all Tasmanians and who will be benefited by this initiative,” he said.

Mr Gutwein said the initiative would cost about $17 million over the forward estimates.

“We need to leverage the economic recovery that we are seeing to benefit more Tasmanians and especially young Tasmanians,” he said,