The idea is the latest brainchild of the Central West Community Union Alliance's Joe Maric and also has the backing of Orange Business Chamber president Tony Healey.

Currently the state government slogs businesses with payroll tax of 5.45 per cent when its yearly wages bill hits the threshold of $750,000.

Before Electrolux announced its closure the state government promised the company a $4 million payroll tax break if it was to remain open.

Member for Orange Andrew Gee has asked for the money to be redirected to assist the redundant workers.

A $5000 rebate dubbed the jobs action plan already exists to encourage all employers in NSW to take on more workers up until June 30, 2015.

But Mr Maric said it doesn't go far enough, and believes there should be a substantial reduction in payroll tax and a full exemption for small to medium businesses and for Electrolux staff starting their own business.

"If this [rebate] has been around since 2011 why hasn't it be been put on the table?" he said.

"It's hardly any incentive really ... when an employee may cost $50,000 to $75,000 a year."

Mr Healey said payroll tax was a major burden for business and the current rebate should be higher and extended beyond 2015.

"The government has got to put its hand in its pocket and help out," he said.

"They need to do everything they can think of to help businesses."

Mr Maric said state government cuts to payroll tax could go alongside federal government spending on targeted training for the specific employers willing to take on more workers.

"From the worker’s point of view they get training and a job created for them," he said.

He believes the scheme would be in line with Prime Minister Tony Abbott's speech to a recent economic forum where he said the government needed to remodel taxing to help businesses.

"I'm happy to sit down and talk to Mr Gee and [member for Calare] Mr [John] Cobb and look at the factors of which is the best way to go," he said.

Mr Maric said the scheme could begin in the central west and be rolled out in other areas across the state.

Mr Healey agreed and expects it to be discussed at a joint Orange City Council/Electrolux jobs expo on February 21 and the union alliance's jobs' summit on March 4.

"I think everybody has thought of an idea we just have to get them out there," he said.

"We've got to try and help these people and help businesses."

clare.colley@fairfaxmedia.com.au