The NSW Opposition claims thousands of businesses are fleeing the state, and says a Sloane Liberal and Nationals government, if elected, would fix it with the most competitive payroll tax regime in Australia.
According to an analysis by Business NSW of Bureau of Statistics data, more than 3,000 businesses left NSW over the past three years, while Queensland gained more than 4,000 in the same period. The figures come from Business NSW’s own analysis and have not been independently verified.
Under the Opposition’s plan, a Sloane government would raise the payroll tax threshold from $1.2 million to $1.5 million, cut the payroll tax rate from 5.45 per cent to 4.75 per cent for businesses with a national payroll under $10 million, and index payroll tax thresholds to inflation to stop bracket creep. The Opposition says this would remove about 4,000 businesses from the payroll tax system altogether, and give a further 25,000 the lowest payroll tax rate of any Australian state, with some businesses saving up to $75,850 a year.
“Businesses are voting with their feet because NSW has become too expensive to invest, employ and grow,” NSW Opposition Leader Kellie Sloane said.
“Payroll tax is a tax on jobs, investment and growth. If we want more businesses to invest, employ more people and expand, we need a more competitive tax system,” Ms Sloane said.
The Opposition points to broader economic figures to back its case, claiming the NSW economy grew by just 0.9 per cent last year, the lowest of any state, and that more than 6,200 businesses closed their doors in the same period. Those figures were not independently sourced or verified.
NSW Nationals Leader and Shadow Minister for Small Business Gurmesh Singh said the trend should be treated as a warning.
“When businesses are leaving the state in record numbers, that’s not just a statistic, it’s a warning that NSW needs reforms and businesses need us to back them,” Mr Singh said.
The plan has been welcomed by Business NSW, the Pharmacy Guild, the Housing Industry Association, the Australian Industry Group and the Motor Trades Association of Australia, all of whose members would stand to benefit from a lower payroll tax bill. Business NSW, whose own analysis underpins the Opposition’s exodus figures, is also among the groups backing the plan.
“Reducing payroll tax makes it easier for businesses to take on more staff and invest in growth,” Business NSW chief executive Daniel Hunter said.
The Opposition’s plan also includes repealing Labor’s union right of entry laws, doubling funding for the Business Connect advisory service, and commitments to lower business energy costs and develop a broader industry strategy.
The policy is contingent on the Coalition winning office, and no modelling of its cost to the state budget was included in either release. Neither the NSW Government nor Treasury figures were provided for comparison.
“NSW needs tax settings that reward growth, investment and job creation, which is exactly what our payroll tax reforms are designed to deliver,” Ms Sloane said.
The NSW Election will be held on Saturday, 13 March, 2027.
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