In answers to questions on notice received today (Economics Committee AET 34), Treasury has confirmed that the Labor Government refused to consider the impact of its proposed increased in the compulsory superannuation levy on small business employment.

Treasury admitted that payroll tax would be levied by state governments on the increased superannuation levy payments, which the Gillard Labor government pretends will have no impact on employment.

“Labor’s assault on independent contractors already threatens small business, the proposed increase in the superannuation levy from 9 to 12 percent and the consequent increased payroll tax burden will hurt small business’ capacity to employ and grow,” said Senator Scott Ryan.

As well as forcing payroll tax higher for those small business that already pay it, the increased superannuation levy will force up payroll costs, so many businesses will be brought into the job destroying payroll tax threshold for the first time.

“Labor promised prior to the 2007 election that it would not increase the superannuation levy.  Not only has Labor broken an explicit election commitment, it is forcing more small businesses to pay more payroll tax which will make it harder for small businesses to employ people.”

“Labor simply does not understand the struggle of small business people and the impact payroll tax has on jobs.”

A Victorian Employers’ Chamber of Commerce and Industry survey in July last year highlighted this risk when 60% of employers surveyed agreed that the proposed increase would “impact on their capacity to employ.”

Small business now faces the double whammy of an increased superannuation levy and increased payroll tax. Even the Henry Review recommended the abolition of payroll tax.

Yet Labor didn’t even have to decency to consider the impact an increase in the superannuation levy would have on the cost of employing people.

“This is another secret Labor tax slug on small business employment,” said Senator Ryan.