ANRA calling for payroll tax relief to help businesses save 55,000 jobs

Posted by Isobel Drake on 27th February 2009

The Australian National Retailers Association, which represents the likes of Coles, Woolworths and Franklins, is advocating a national plan for payroll tax relief which they believe could assist cash strapped employers save up to 55,000 jobs.

ANRA CEO Margy Osmond wrote to the Prime Minister, Premiers and Chief Ministers two weeks ago proposing a national plan which would cut payroll tax to a uniform rate of 4%.

“Cash payments to households and infrastructure spending will stimulate the economy, but some of this money will be saved or, in the case of construction projects, be spent next year or later. There is a pressing need for a broader strategy which helps employers retain jobs now and a cut in payroll tax is the answer,” ANRA CEO, Margy Osmond, said. “The retail sector is Australia’s largest single employer, providing 1.5 million jobs. 2008 was one of the worst years on record and the sector has seen job losses in all States but WA and Tasmania. In the last 12 months, the retail sector in NSW and Victoria has shed 47,000 and 16,500 full-time jobs respectively, and we’re going to see more jobs go in coming months.”

“At this time, it is extraordinary that States and Territories should impose a $16.7 billion tax on jobs. Businesses with as few as 10 employees are paying payroll tax. Payroll tax affects businesses in every sector of the economy.”

The ANRA plan would see the burden of payroll tax on jobs cut by almost 25%, with the cost of this tax relief shared equally between the Commonwealth, States and Territories. The ANRA plan would replace eight different payroll tax rates with a single national rate.

“To ensure that this relief was tied to protecting jobs, ANRA proposes that States and Territories would provide this payroll tax relief by rebates to employers who maintain jobs,” Mrs Osmond said.

In NSW, for example, the plan would slash the cost of employment by $1.9 billion, according to ANRA. Cutting payroll tax rate by 30% would ease the pressure on thousands of employers. “In NSW, a business with 100 employees could save $103,000 in tax under the ANRA proposal, a saving almost equal to the annual wages of two full-time employees,” Mrs Osmond explained. “Making businesses more confident about retaining staff will boost employees’ sense of job security and encourage Australians to stimulate the economy.”