❓ Dr. Thomas questions the Treasurer's office on the calculation and assumptions behind the announced payroll tax relief, particularly regarding the estimated cost and the impact of business investment decline. The Minister's response is brief, referring back to the initial calculation method.
AnsweredQoN 1574Legislative Council
QuestionView source ↗
PAYROLL TAX
1574. Hon Dr STEVE THOMAS to the minister representing the
Treasurer:
I refer to the government's
announcement of payroll tax relief on 31 October 2019, which proposed raising
the payroll tax threshold to $950 000 on 1 January 2020 and then to $1 million
on 1 January 2021, and to question on notice 2603 answered on 28 November 2019.
(1) How has
Treasury calculated the estimated tax relief of $170 million over four years,
as cited in the government's media release of 31 October 2019?
(2) Does the
Treasurer stand by the answer to question on notice 2603, which stated that in
2018–19, for employers with payrolls between $850 000 and $1 million,
the government collected $21.9 million?
(3) If yes to
(2), if the government raised the threshold initially to $1 million without
stepping it up over two years, and there was no increase in economic activity
and no wages growth, would the four years of this cost revenue four times $21.9
million or a total of $87.6 million?
(4) What growth
assumptions is the government making in relation to the number of employers
with payrolls between $850 000 and $1 million expected to be present in Western
Australia to provide relief of $170 million over four years?
(5) The latest Treasury
economic note released on 4 December, in relation to Western Australia's
state final demand states —
� Business investment decreased by 4.5% in the September quarter,
and has declined by 7.6% in annual average terms.
Are these
assumptions of twice the savings of last year's payroll tax income over
four years realistic?
The PRESIDENT : That is a powerhouse
of a question to end our year, is it not? Minister for Environment, I look
forward to your response.
1574. Hon Dr STEVE THOMAS to the minister representing the
Treasurer:
I refer to the government's
announcement of payroll tax relief on 31 October 2019, which proposed raising
the payroll tax threshold to $950 000 on 1 January 2020 and then to $1 million
on 1 January 2021, and to question on notice 2603 answered on 28 November 2019.
(1) How has
Treasury calculated the estimated tax relief of $170 million over four years,
as cited in the government's media release of 31 October 2019?
(2) Does the
Treasurer stand by the answer to question on notice 2603, which stated that in
2018–19, for employers with payrolls between $850 000 and $1 million,
the government collected $21.9 million?
(3) If yes to
(2), if the government raised the threshold initially to $1 million without
stepping it up over two years, and there was no increase in economic activity
and no wages growth, would the four years of this cost revenue four times $21.9
million or a total of $87.6 million?
(4) What growth
assumptions is the government making in relation to the number of employers
with payrolls between $850 000 and $1 million expected to be present in Western
Australia to provide relief of $170 million over four years?
(5) The latest Treasury
economic note released on 4 December, in relation to Western Australia's
state final demand states —
� Business investment decreased by 4.5% in the September quarter,
and has declined by 7.6% in annual average terms.
Are these
assumptions of twice the savings of last year's payroll tax income over
four years realistic?
The PRESIDENT : That is a powerhouse
of a question to end our year, is it not? Minister for Environment, I look
forward to your response.
AnswerView source ↗
Thank you very much, Madam
President. Although it was a very long question, I can assure you, the answer
is not as long.
(1) Using the
most recent data available at the time of making its estimate, Treasury applied
expected wages and employment growth to the payroll tax data to project future
payroll tax estimates under the existing payroll tax rate scale over the
forward estimates period. It then applied the proposed payroll tax scale to the
projected payroll tax data. The difference between applying the two scales produces
an estimate of the total cost of the proposed payroll tax scale over the
forward estimates period.
All employers liable for payroll tax
and with Australia-wide payrolls up to $7.5 million will benefit from the
payroll tax exemption threshold increase. The benefits are not limited to just
those employers with payrolls between the current $850 000 payroll tax
exemption threshold and the proposed $950 000 and $1 million thresholds.
(2) Yes.
(3)–(5) Refer
to (1).
President. Although it was a very long question, I can assure you, the answer
is not as long.
(1) Using the
most recent data available at the time of making its estimate, Treasury applied
expected wages and employment growth to the payroll tax data to project future
payroll tax estimates under the existing payroll tax rate scale over the
forward estimates period. It then applied the proposed payroll tax scale to the
projected payroll tax data. The difference between applying the two scales produces
an estimate of the total cost of the proposed payroll tax scale over the
forward estimates period.
All employers liable for payroll tax
and with Australia-wide payrolls up to $7.5 million will benefit from the
payroll tax exemption threshold increase. The benefits are not limited to just
those employers with payrolls between the current $850 000 payroll tax
exemption threshold and the proposed $950 000 and $1 million thresholds.
(2) Yes.
(3)–(5) Refer
to (1).
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