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Small business owners in South Australia say they will struggle to stay afloat without help from the state government.
Simone Douglas owns four businesses in South Australia, including The Duke of Brunswick Hotel in Adelaide and The Port Admiral Hotel in the city’s west, but was recently forced to sell one.
Douglas’s accountant told her she had paid all her business profits in tax last financial year.
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She had to cut staff hours and negotiate supplier costs to ensure all her businesses didn’t collapse.
“I went back to work in restaurants. I’ll be working an eight-hour shift today on the public holiday because we can’t justify paying someone double time,” she said.
“There’s an absurd amount of pressure on business wallets … as much as on family wallets.”
Douglas pays $11,000 a quarter for electricity and $8,000 for gas for each pub, despite installing solar panels and LED lights.
She also pays about $1,000 a month in insurance and $1,000 in policies to cover her employees’ work.
Douglas said staff wages have increased 25 percent since the last payroll tax increase in 2019.
“I have to come up with an extra $7,000 a month to pay the payroll tax bill that I didn’t have to pay before,” Douglas said.
She said that under current government rules, her three businesses are grouped together for payroll tax, meaning she has to shell out an extra five per cent as part of the labor charge.
Meanwhile, Adelaide restaurant Gang Gang will close its Parkside venue.
Owner Morgen Winn-Hadinata said the payroll tax is one of the biggest costs for her business.
South Australian businesses currently have to pay a variable payroll tax rate of 0 to 4.95 per cent if their paid wages exceed $1.5 million.
The South Australian Opposition and the South Australian Chamber of Business are calling for the threshold to be increased to $2.1 million and a tax exemption for trainees.
Wynn-Hadinata said the increase would make a big difference to her business.
Under the latest state budget, the state government is offering grants to businesses that invest in energy efficiency.
The opposition said it did not go far enough and many businesses were “disappointed” with the state budget.
“It has become completely unaffordable and unsustainable for businesses to continue to operate in this current market and we are calling on the government to do more, to do better, to support South Australian businesses,” Shadow Finance Minister Heidi Girolamo said.
Wynn-Hadinata said small businesses that rent space are unlikely to use the energy efficiency grant because they don’t own their premises.
Douglas said that even after the energy efficiency changes she made to her pubs, her bills were incredibly high.
Deputy Prime Minister Susan Close said there was “no evidence” that the payroll tax cut would boost employment.
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