That's the view of Business NSW which has included both items on its pre-submission to the state government for inclusion in the upcoming June 16 budget.

Business NSW regional manager for Western NSW, Vicki Seccombe, said the road upgrade was on the body's Infrastructure Priority list.

"Not only will these improvements lead to less congestion and shorter journeys through the Blue Mountains for our businesses, resulting in reduced travel costs for freight, but we know it will also help open up Western NSW to more tourists and help our local economies recover," she said.

Ms Seccombe said regional businesses also needed relief from payroll tax.

She said the state government had planned to lift the threshold of when businesses had to pay payroll tax to $1 million by 2021-22.

"We are now advocating that regional employers be given immediate access to the $1 million threshold due to drought and bushfires," she said.

The threshold level is the amount of payroll expenditure by a business. Ms Seccombe said the current limit was a disincentive for firms to employ more people.

She said it also cost small business thousands of dollars each year in administration costs. Ms Seccombe said Business NSW had been pushing for payroll tax relief for several years.