Treasurer Dominic Perrottet has revealed the NSW state government’s plans to support small business and communities impacted by COVID-19 as he announced the budget to parliament today. With a focus on cutting red tape and providing support, the budget policies will make it easier to run a business so small business owners can re-build, attract investment and create jobs for the future.
Announcing the plans Perrottet revealed the state will not return to surplus until 2025 and the 20-21 budget will serve up an historic $16 billion deficit.
Amongst the treasurer’s plans:
Payroll tax cuts
Following on from the May increase in the payroll tax threshold, Perrottet has said NSW businesses will now benefit from further cuts. The payroll tax-free threshold will now increase from $1 million to $1.2 million. While the government has also pledged to cut the payroll tax rate from 5.45 per cent to 4.85 per cent from 1 July 2020 – July 2022. It’s expected these cuts will save the state’s small businesses around $2.4 billion.
ScotPac CEO Jon Sutton welcomed the announcement to increase the payroll tax and encouraged other states to look at their payroll tax regimes to aid in the economic recovery of the nation’s small businesses.
“Simplifying the complex national tax system, getting rid of state payroll taxes and cutting red tape nationally would have the biggest daily impact for Australia’s small to medium business sector,” he said.
Fee relief for government charges
Perrottet has also promised fee relief for those small businesses not currently paying payroll tax. The budget also commits a further $472 million to provide these small and medium-size businesses with a $1,500 digital voucher for the cost of government fees and charges.
Vouchers to stimulate the economy
The treasurer has also committed half a billion dollars to the Out and About program aimed at stimulating consumer spending with local businesses across the hospitality and entertainment sectors. The new scheme, which will be administered by Service NSW, will see every NSW resident over 18 gifted with 4x $25 dollar vouchers to spend on eating out and entertainment. Perrottet says the scheme will help those sectors hardest hit by the pandemic and will stimulate the local economy.
City businesses to be revitalised
In keeping with the revitalisation theme, the NSW government has also joined forces with the City of Sydney to deliver a grants program aimed at reinvigorating the CBD. $15 million has been set aside to assist city businesses with funding programs that will support live outdoor entertainment and alfresco dining. A further $39.3 million has been earmarked for the Business Connect program to help small business owners receive the advice they need to survive and thrive post-pandemic.
Dale Dixon Head of Product Small Business MYOB, said the initiatives outlined in today’s Budget will go a long way to restoring business confidence and provide a much-needed boost for small businesses.
“Prior to October’s Federal Budget, MYOB found 35 per cent of small and medium-sized businesses in NSW and ACT expected to take more than 12 months to return to pre-COVID levels of profitability*. The programs outlined today will support SMBs during this challenging time.
“We particularly applaud the Out and About program, which will help many smaller businesses in NSW regain some of the losses they experienced throughout 2020, and the payroll tax cuts, which will provide welcome relief to many businesses.”
Regional business not forgotten
Perrottet said the 2020-21 NSW Budget will help businesses every step of the way with funding to keep rebuilding communities still recovering from natural disasters, major investments to generate jobs, and additional mental health services to ease the strain of an impossibly difficult year.”
As countries around the world have gone back into lockdown, Perrottet said the pandemic offers an opportunity to showcase the advantages of living and working in NSW. To attract investment and develop global partnerships which strengthen the state’s economy and create jobs for the future.
“This will enable the NSW Government to better connect the State’s talent, ideas, products and services to rapidly growing markets and build partnerships with established markets to bring new investment to NSW.
The Budget will invest:
- $100 million in grants to the Regional Jobs Growth Fund to incentivise businesses in regional NSW to invest, expand their operations, get new customers through the door and create new jobs.
- $300 million over two years to the Regional Growth Fund to deliver an extra new round of economic development and job creation programs such as Stronger Country Communities program.
more to come
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