The WA opposition will not block the Labor government's proposed payroll tax increase, despite describing it as a broken election promise.
The five-year tax hike will apply to companies with a payroll between $100 million and $1.5 billion a year - less than one per cent of businesses - to raise $435 million over four years.
Opposition leader Mike Nahan said it differed to the gold royalty hike they rejected - leaving a $392 million budget hole - which would have cost thousands of jobs and was campaigned against by the industry.
"We don't support it, it is a broken promise ... but we chose to let the government govern," he said on Tuesday.
Businesses had not suggested opposing the legislation, but proposed increasing the threshold, which should be considered, he said.
"There is merit in providing a payroll tax rebate for businesses with payrolls up to $1 million, and while the cost of it would represent a mere 0.1 per cent of total payroll tax revenue, it would support around 1100 small businesses by effectively removing their payroll tax liability."
WA Chamber of Commerce and Industry chief executive Deidre Willmott backed the premier's commitment to discuss the threshold ahead of next year's budget, before the tax rate is introduced on July 1.
"CCI has called on the government to increase the payroll tax threshold by $100,000 ... which will partially offset the minimum 1334 jobs that will be lost by the payroll tax rate increase."
Treasurer Ben Wyatt said the opposition's decision did not excuse their actions over the gold royalty.
"I am pleased the Liberal party reluctantly, belligerently finally got themselves to a position where perhaps for the first time they're starting to wear some responsibility for the fiscal mess they've created."
But the opposition dismissed claims the revenue would pay down debt and was part of budget repair.
Premier Mark McGowan had earlier warned objection to the hike could mean an increase to household fees and a drop in WA's credit rating.
He also described the actions of the gold industry and Chamber of Minerals and Energy as "destructive and unjustifiable", and believed the public backed him.
"It certainly has made me reappraise some of my views of some of those companies and some of those individuals," he told ABC radio.
Mr Wyatt said he was willing to reintroduce legislation agreeable to the Liberals.
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