Queensland Premier Annastacia Palaszczuk and Treasurer Jackie Trad announcing the Queensland Budget on Tuesday.
Queensland Premier Annastacia Palaszczuk and Treasurer Jackie Trad announcing the Queensland Budget on Tuesday. GLENN HUNT

QLD BUDGET: Payroll tax overhaul for regional business

QUEENSLAND'S business community has welcomed with open arms a government move to slash payroll tax for regional businesses.

But the state's builders have questioned why initiatives to revitalise the house construction industry have not been returned, complaining regional builders are "bleeding from the eyes".

As part of Tuesday's Budget, the Queensland Government announced an overhaul of the payroll tax system with the tax threshold to be increased from $1.1million to $1.3million for all Queensland businesses - costing $885million.

Regional businesses will receive the added benefit of a 1per cent payroll tax

Companies will have to be registered outside the southeast and prove they are hiring more than 85per cent of their employees locally.

But payroll take will be increased by 0.2per cent for businesses with a payroll of more than $6.5million.

Treasurer Jackie Trad said that would impact about 6000 big businesses but the threshold changes meant 1500 additional businesses would no longer pay any payroll tax.

"Small and medium-sized enterprises make up more than 99per cent of all businesses in this state, and if even one in five of them was able to employ just one extra person, that would be more than 80,000 new jobs.

"That is why a centrepiece of this budget is help for small and medium-sized businesses, especially in the regions."

Chamber of Commerce and Industry Queensland head of media Dan Petrie said Queensland businesses that had been struggling with high costs would welcome the tax relief.

"This will be transformative for a number of small businesses across Queensland, which really for the past decade have endured incredibly high power prices, escalating costs and for that reason alone the government has listened," he said.

"For the state to confront the global economy we need the state to be firing on all cylinders, so the skills and training package, the discount on payroll tax for businesses in the regions is absolutely crucial."

Mr Petrie was disappointed payroll tax had been increased for big businesses but said small business was the backbone of the state's economy.

"Ideally you don't want to see (the increase) at all. The payroll tax at its very core is hardly conducive to employing more people, so it goes against the idea of stimulating growth in that area.

"But the simple fact is Queensland is a small business state. If you are going to stimulate the state, then the way to do it is to energise the small business sector."

But Master Builders deputy CEO Paul Bidwell said the Government's decision not to bring back incentives for first-home owners to buy houses was disappointing.

"House builders across Queensland and in regional Queensland particularly are going to be disappointed that the Government decided not to bring back the $5000 boost to the first-home owner's grant when the regions are bleeding through the eyes is the only way to put it, particularly in the residential sector," he said.

Queensland Tourism Industry Council CEO Daniel Gschwind said payroll tax reform would make a "substantial material difference" for small businesses, including restaurateurs and tourism and accommodation operators.

Mr Gschwind said more than 80per cent of tourism businesses were small businesses that would benefit from the reform.


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