This NSW budget has been very much anticipated as we continue to battle the global COVID pandemic.

To date the NSW government has spent

  • almost $6.4 billion in tax relief and
  • more than $860 million in grants;

This budget is optimistic in its assumptions regarding

  • when the state borders will open (Xmas)
  • when the vaccine will be available (mid next year)

It focusses on further economic stimulus with economic reforms being a longer-term objective.

 

Key highlights for businesses

  • Payroll tax cuts for most businesses
  • $1,500 voucher to smaller businesses
  • Payroll tax relief for businesses expanding their NSW workforce
  • $100 voucher for hospitality venues

Payroll tax cuts

  • The previously increased the payroll tax threshold (to $1 million) will be further increased permanently to $1.2M.
  • Additionally, the payroll tax rate will be temporarily cut from 5.45 per cent to 4.85 per cent for the next two years (2020-21 and 2021-22).

Obviously these changes will take many small and medium businesses out of the payroll tax system and reduce the payroll tax expense on those businesses that continue to be subject to payroll tax.

Helping with fees and charges

  • Small and medium size businesses, which do not pay payroll tax, will be provided with a $1,500 digital voucher that can be applied towards the cost of government fees and charges.

Jobs Plus Program

  • Businesses that create (net) at least 30 new jobs in NSW will be eligible for payroll tax relief for up to a four-year period.
  • For existing businesses in NSW or businesses that relocate operations to NSW from interstate or overseas.

The goal is to create or support 25,000 jobs between 15 December 2020 and 30 June 2022.

Hospitality venues

To stimulate cafes, clubs and restaurants every adult will receive $100 to spend i.e. every adult in NSW will get four $25 digital vouchers to spend separately on dining and entertainment.

  • 2 vouchers can be used for eating in venues and
  • 2 can be used for entertainment and recreation – think cinemas, amusement parks, performing arts and art galleries.

And these cannot  be used for alcohol, tobacco or gambling!

Tax Reform

The NSW government has signaled an intention to reform the property tax system which it describes as “inefficient”.

How they will transition away from the current transfer (stamp) duty and land tax system is yet to be devised.

The public consultation will run to March next year.

The objective is to lower barriers to home ownership and boost long-term economic growth.

Other spending stimulus Will be directed to:

Arts and culture $291 million –

  • $175 million over the next five years towards the Made in NSW fund, which supports international productions and local television drama series.
  • a few hundred million headed for existing funding programs at the Art Gallery of NSW, the Powerhouse Precinct Parramatta and Walsh Bay Arts Precinct.

The Bush –

  • $1.8 billion will go towards new infrastructure projects.
  • Almost $1 billion will go towards building and upgrading regional hospitals and healthcare facilities,
  • Schools will get $650 million for new infrastructure.
  • Farmers will get extra assistance to help recover from the drought.
  • Regional commuters will benefit from $8.7 billion going towards roads and transport, with nearly every major highway receiving some form of investment.
  • Buses in the bush will also pick up a $13.5 million boost to services in key regional centres.

Social housing –

  • Social and Aboriginal housing across NSW will pick up $812 million for the construction of new properties and maintenance and upgrades to current housing stock.

General Advice warning: the information in this article is general in nature, it is not advice specific to your needs. If you want to act upon the information in this article then you should seek advice from a qualified professional. VJC WM accepts no liability to any party for acting from this information unless they have sought advice in a formal engagement with VJC WM for this purpose.