Western Australia's tax revenue has surged nearly 68 per cent over the past five years, reaching about $17 billion this financial year, as soaring house prices and a robust jobs market deliver a massive windfall to the State Government.
Revenue growth and spending
The revenue from land tax, stamp duty and payroll tax is dramatically higher than the $10.1 billion recorded in 2021. However, it is expected to dip slightly in the coming year due to fewer large commercial property transactions. This wave of cash has helped fund Treasurer Rita Saffioti's ambitious spending plans but has not financed serious tax reform, despite calls from economists and lobbyists.
Ms Saffioti acknowledged the growth across the tax base during a presentation to journalists, stating, "We've had solid revenue growth, and as a result, we've been able to prioritise and spend in those core areas that the public expects."
Call for business tax cuts
Chamber of Commerce and Industry WA chief economist Daniel Kiely said on Thursday that "more could have been done" through tax cuts for businesses. "We did get additional GST contributions ... (so) we could have tackled payroll tax," he said. "This continues to be a key burden on small and medium sized businesses here in WA and it's the number one issue affecting the growth of those businesses. We need to unshackle small businesses and make sure that we can maximise the growth opportunities in our state."
Payroll tax concerns
More than $6.2 billion was raised through payroll tax in the 2026 financial year, up about 66 per cent compared to 2021. The Budget papers attribute this to "strong growth ... driven by a buoyant domestic economy and labour market, which supported above long-run average hiring and wages growth." Yet experts broadly agree that payroll tax is among the most damaging taxes. Every $100 million of revenue raised through the levy costs the economy about $140 million and weighs on job growth.
Stamp duty inefficiency
Stamp duty, a tax on buying and selling houses, is similarly considered especially damaging compared to other charges such as land tax. The impost on moving homes attracted criticism from economists this week, and Ms Saffioti responded with a modest increase to the tax-free threshold. Committee for Economic Development of Australia head of research Danika Adams said moving away from the tax might hit revenue in the short term but the impact would smooth out in the long run. "When the finances are good, that's the opportunity to make that movement ... make revisions to stamp duty," she told The West Australian after the Budget was released. "We know stamp duty is a really inefficient tax. Right now we need to be moving our housing stock along and stamp duty is a real barrier. It's not just moving house, it's also labour mobility. If people want to move locations for a job, stamp duty can be a significant barrier."
Opposition's stance
Shadow Treasurer Sandra Brewer said reducing stamp duty by 20 per cent would help families move homes and help get more homes listed on the market. Ms Saffioti has hit back at calls to axe the tax entirely, warning it would require a fresh revenue source in the form of higher land tax.
