MINING magnate Clive Palmer has told the Queensland government it should scrap payroll tax to boost the state's economy.

Mr Palmer - who's been asked to reconsider his LNP membership after attacking the Newman government - said scrapping the tax would encourage businesses to relocate to Queensland.

"It would demonstrate to the community that Queensland is open for business, providing a huge incentive for medium and large businesses to be relocated here and drive our economy forward," he said in a statement on Wednesday.

He said payroll tax was a burden on business owners, and resulted in lower wages and reduced profits.

It also pushed up the price of goods and services without delivering much to government revenue, he said.

Comment is being sought from Treasurer Tim Nicholls.

Last week, Mr Palmer said he was seeking advice after acting LNP president Gary Spence asked him to reconsider his life membership of the party.

Mr Spence said the chairman of Waratah Coal, who was once the LNP's biggest donor, had to choose between his position as a head of industry and a member of the party.

He cited Mr Palmer's "significant policy differences" with the Newman government on matters associated with his own interests in Queensland.

The issue came to a head after Mr Palmer attacked the government's decision to slash thousands of public sector jobs and its first budget, which included a hike in coal mining royalties.

Originally published as Axe Qld payroll tax, Palmer tells Newman