The Flight Centre Travel Group Ltd (ASX: FLT) share price is underperforming on Thursday amid reports a new Queensland tax has worried the company’s boss.
Flight Centre CEO Graham Turner told the Australian Financial Review (AFR) a new levy on large businesses represents “a big blow” to the company.
At the time of writing, the Flight Centre share price is $17.65, 0.9% lower than its previous close.
Let’s take a closer look at the new tax that’s reportedly expected to drag on the ASX travel giant’s bottom line.
Flight Centre share price slips as boss slams new tax
The Flight Centre share price is in the red today. Meanwhile, the Brisbane-based company’s boss is said to have slammed a new tax on large businesses.
Turner has reportedly called the levy, designed to fund mental healthcare services in Queensland, “another financial blow”.
“The reality is we … put a lot of effort into [mental health initiatives] already and a lot of money,” Turner said, per the AFR.
The levy was announced alongside the state’s budget on Tuesday.
It will see businesses with payrolls greater than $10 million paying a 2.5 cent levy for every $10 of taxable wages they pay above that level. Businesses with payrolls of more than $100 million will pay an extra levy of 5 cents for every $10 of taxable wages they pay above that figure.
That’s expected to inject an extra $1.64 billion into the state over five years to support mental health and wellbeing and combat substance abuse. Fewer than 6,000 businesses are expected to be impacted by the levy.
Queensland treasurer Cameron Dick commented businesses eligible to pay the tax will also benefit from additional mental health services.
“The productivity gains from additional investment in mental health will dwarf the costs … and larger businesses are well-positioned to reap these productivity rewards,” Dick said, continuing:
Big businesses like large supermarkets and banks have done well out of COVID … and are well placed to chip in to address mental illness.
But Flight Centre hasn’t, in fact, benefited from the pandemic. Turner was quoted as saying:
I’ve got nothing against the coal companies but at least they are doing pretty well at the moment. For us, it’s not great news that’s for sure.
The Flight Centre share price has slipped more than 20% since the company announced its return to profitability in March.