TAX HITS JOBS AND GROWTH

Pressure is growing for important reforms to business taxation to stem an alarming loss of jobs and an exodus of businesses from NSW to other states.

The Independent Member for Wagga, Dr Joe McGirr, and Business NSW Riverina Murray have joined forces to call for changes that will restore confidence to the business sector and protect the state’s economy from further decline.

It comes as Business NSW releases data that shows NSW has lost 6,200 businesses over the past nine years – with many moving to Queensland – because of high operating costs and a heavy tax burden.

Over the same period, Queensland has gained more 8500 new businesses, which Business NSW says shows the northern state is clearly winning the business growth “state of origin”.

Dr McGirr said the NSW Government should move quickly to level the playing field by reforming the payroll tax system.

"In parliament this year, I called on the government to not only increase the threshold at which small businesses become liable for payroll tax, but also to follow Victoria’s lead by introducing a special low rate of payroll tax for rural and regional businesses,” he said.

“High payroll tax is a tax on jobs and growth and at a time when communities are facing serious cost of living pressures, we should be encouraging businesses to invest in the future, not taxing them for growing their operations and wages output.”

The Regional Director of Business NSW, Riverina Murray, Serena Hardwick, said the number of businesses indicating they have the intention to reduce headcount had increased by 30 per cent in the past 12 months.

“Our 2025 data indicated that 4 per cent of businesses in the Riverina had the intention to reduce head count, now we have 34 per cent,” she said.

“We have just had the minimum wage increased, but for business there was no increase in the payroll tax threshold. Businesses are just left paying more. We would like to see the NSW Government increase the threshold and implement a regional payroll tax in line with Victoria.”

Dr McGirr said the payroll tax threshold in NSW of $1.2 million was too low and should be increased to $4m to free small businesses from a major growth impediment.

He also called on the NSW Government to copy the Victorian model of a payroll tax rate of just over 1.2 per cent for regional businesses, saying the reduction would remove a huge burden on business owners facing unique challenges in non-metropolitan environments.

Dr McGirr has written to the Minister for Finance, Courtney Houssos, urging her to act quickly on payroll tax reform.