Payroll Tax Exemption Change to Fund Training Places

The McGowan government will tighten payroll tax training exemptions for businesses that will result in new funded training places next year.

9,600 new jobs will be created under the new scheme that will come into effect from December 1 this year that will prevent companies from avoiding paying payroll tax.

“We need a system which provides support for real training for real jobs and value for WA taxpayers,” treasurer Ben Wyatt said.

“The previous system has been open to abuse. A grant scheme will be far more transparent.”

The scheme will be redesigned though a two stage process that will initially redirect savings into new training places. A second stage will involve a grant scheme for apprenticeships and traineeships that can be accessed by all businesses.

Exemptions will be limited to all apprentices and trainees earning less than $100,000 working with employers. Savings will be put towards 43,350 training places over the next four years.

Current employee contracts lodged before December 1 will continue to be exempt if the employee’s annual wages do not exceed $100,000.

The state government will work with industries to develop stage two of the changes to replace all remaining apprentices and trainee exemptions with a grant scheme.

Options will be considered midway through 2018 to be possibly be implemented from July 1 2019.

It came as the state government claims there is evidence that suggests that the exemption for trainees has been used as a tax avoidance measure and not targeting a skills gap in the economy.

Mr Wyatt said the new system will “be a boost to small businesses” which will be available to all businesses.

Education and training minister Sue Ellery said the payroll tax changes will result in more training places and better training support.

“Today’s changes mean thousands more training places can be funded, training can be better targeted and small businesses will also have access to training support,” she said.

She said it closes the gap in training funding.

“This will help fill the gap created by the Federal Government’s changes to Commonwealth funding agreements for training places, which has resulted in $54 million less for Western Australia compared to 2016-17.”

“The Federal Government isn’t making it easy and is leaving WA to pick up the shortfall.”

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