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Updated February 15, 2017 17:21:57

The Barnett Government has pledged to lift the payroll tax threshold for business to $900,000, claiming the change will boost jobs and save small businesses millions.

The change would take effect from January 1 next year, lifting the threshold from the current level of $850,000, meaning any organisation with a total payroll below that figure will not pay the tax.

Treasurer Mike Nahan announced the planned change at a Chamber of Commerce and Industry (CCI) function in Perth, telling the audience of about 200 the Government was committed to further reductions.

"We will look to increase that threshold even further subject to our revenue and expenditure control," he said.

"So we will commit to further tax reductions in payroll tax by increasing the threshold as we have done in the past and as the CCI has argued the case for repeatedly."

The CCI has long argued that payroll tax is a tax on jobs, and reducing or removing it will free businesses to expand and employ more people.

Treasurer Nahan and Premier Colin Barnett toured the depot of West Australian bus company Horizon West buses in Welshpool on Wednesday.

Company spokesman Greg Balla told the Premier and Treasurer payroll tax relief would allow him to expand his staff.

"There's the potential for us to put on another apprentice. Currently we have three apprentices. So this is an opportunity to give us some relief in the payroll tax and employ more people," Mr Balla said.

The Liberal-National government has already twice increased the threshold for payroll tax, from $750,000 to $800,000 and then from $800,000 to the current level of $850,000.

The change will hit the cash-strapped government's bottom line, costing $55 million in tax revenue.

But Dr Nahan said that money would be recouped through additional savings in government expenditure in other areas.

He said it would not be funded by additional debt.

The Government has also announced an increase in the land tax threshold from $301,000 to $360,000 which will cost $24 million over the next four years.

The Treasurer said that would also be funded through additional yet-to-be announced savings.

But WA Labor rejected the Treasurer's assurance the tax cut would be funded through savings rather than debt.

In a statement, shadow treasurer Ben Wyatt said after trashing the state's finances with record debt and deficits, the Barnett Government's claims on tax could not be believed.

"Mr Barnett has delivered an extraordinary increase in state debt and a record budget deficit - mark my words, any tax cuts offered by the Liberals will become just another broken promise," he said.

"This is just a desperate ploy, by a desperate Premier, looking to buy his way back into power."

Topics: elections, political-parties, small-business, tax, wa

First posted February 15, 2017 16:15:50

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WA election: Liberals push payroll tax cut to entice business - ABC Online