Abolish payroll tax, it’s dumb tax: Senator Gerard Rennick

By Jit Kumar
Image by Steve Buissinne from Pixabay

With some Australian states waiving the payroll tax for up to six months for small businesses to help them tide over the Covid-19 economic crisis, Queensland Senator Gerard Rennick has called for the abolition of the same in the entire country once and for all.

Payroll taxes in Australia are levied by state governments on employers based on wages paid by them. The taxes are different in each state.

Calling payroll a “dumb tax”, the Queensland Senator has demanded scrapping of the same and instead advocated the introduction of stamp duty at the national level that “can be distributed by the federal government to states, along with GST, as a percentage of population”.

“What I’d like to see is payroll tax abolished in the states… it’s just a dumb tax people pay to employ people,” Senator Rennick told leading Australian financial analyst Martin North in a recent podcast interview.

“Get rid of payroll tax, bring back stamp duty at the national level and then distribute that, along with GST, as a percentage of population”

“Take a farmer who says, for example, as a 20 million dollar turnover employs 500 people to pick the fruit to get that turnover, he will pay payroll tax. On the other hand, you can take and export that fruit so we’re taxing someone that employs people and exports.

“On the other hand, you can have a car dealer that might sell 20 Ferraris for 20 twenty million dollars a year, but only needs three people and doesn’t pay payroll tax, so where’s the logic, it’s just a silly tax. So, I would argue get rid of payroll tax, bring back stamp duty at the national level and then distribute that, along with GST, as a percentage of population,” he said.

In fact, time and again, there have been calls for abolition of payroll tax to help businesses reinvigorate the economy. Many industrialists have termed it as a disincentive for businesses, one that typically prevents them from hiring more workers.

In June last year, multi-billionaire iron ore magnate Gina Rinehart called on the government of Western Australia to turn the state into a business utopia by getting rid of payroll tax, barely a week after the Queensland government had announced it would lift its payroll tax threshold from $1.1 million to $1.3 million to “make it cheaper to run a business in Queensland”.

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