The NSW Govt. has announced a $1 billion Working for NSW Fund to support businesses, generate cashflow and retain employees within government and non-government businesses. The budget also includes $6 billion towards waiving and deferring taxes, fees and levies, including payroll tax and licencing and registration fees to support businesses.
As part of recognising the disproportionate impact of Covid-19 on certain industries, the government has also announced targeted assistance, including:
- $50 million for arts rescue and restart;
- $27.3 million for sports;
- $11.6 million to support the taxi industry.
The government will also contribute $39.3 million in funding to the Business Connect program, set up to assist businesses in need of advice to help navigate through the challenges of Covid-19.
Payroll tax reform to boost business, trade and investment.
The extension of the payroll tax threshold to $1.2 million is the cornerstone of the NSW 2020 budget. As part of the Jobs Plus Program, the NSW government is slashing up to four years’ worth of payroll taxes for every new job created by a business that creates 30 new jobs in NSW by June 2022.
In addition, the Payroll tax rate for all businesses in NSW in 2020-2021 and the following financial year will be slashed from 5.45 per cent to 4.85 per cent, which the government states will be the lowest rate in any metropolitan area in Australia.
The $250 million Jobs Plus program will also offer free office space, subsidised training programs and fast-tracked planning approvals.
Furthermore, small to medium-sized businesses that do not pay payroll tax will receive a $1,500 digital voucher for the cost of government fees and charges.
It is estimated by the government that the payroll tax cuts will provide a saving of $2.4 billion for businesses for the current financial year.
NSW taking charge in ending stamp duty
The NSW government has decided that it will undertake public consultation on tax reforms related to make stamp duty for property owners optional and reduce upfront costs for property buyers.
The proposed model would include the following measures:
- Provide property buyers a choice between paying the total stamp duty upfront or paying a smaller annual property tax;
- Allow people who opt-in to the system to be cleared of any land tax liability;
- Ensure that current property owners are not buying or selling are not affected;
- Provide first home buyers with a new grant of up to $25,000 in place of the current stamp duty concessions; and
- Include a lower property tax rate for owner-occupiers to support and incentivise home ownership, and higher rates for investors and commercial properties.
NSW Treasurer, Dominic Perrottet has estimated that up to 50 per cent of properties would be paying the annual levy in 20 years in NSW, with all properties paying the tax by 2050.
Mr. Perrottet has stated that for further tax reform to be made, support would be required from the Federal Govt.
Training and upskilling workers
The NSW government will invest $318.6 million over two years in the Skilling for Recovery training package to help jobseekers retrain or upskill and support graduates entering the work force for the first time.
The training program is set to be delivered under the Commonwealth JobTrainer Fund.
Along with this, the government will invest a further $57.4 million over four years towards the Trade Skills Pathways Centre, to tackle skills shortages in the NSW economy and support employment for women.
In addition, grants of up to $5,000 will be available for women for the training and support required to return to the workforce.
Getting out and about
Up to $500 million will be spent on the Out and About program to stimulate the local economy, including restaurants, visitor sites and cultural attractions.
Under the program, every adult resident will be able to claim up to $100 in digital vouchers to spend on eating out and entertainment.
The government will also invest $15 million in a partnership with the City of Sydney to revitalise the Sydney CBD and help businesses get back on their feet through various measures, including the promotion of outdoor entertainment and al fresco dining.
Source: The NSW Budget 2020-2021 Overview