Banks are up in arms over the South Australian government’s plan to introduce its own banks levy, but the state government insists its newly unveiled budget is a blueprint to support for businesses and startups in the region.
Premier Jay Weatherill says the state is focused on building jobs growth in five key sectors, and will help SMEs grow through policies that reduce red tape and cement lower payroll tax rates for small players.
If you’re a small business owner in South Australia, here are three policies you need to know about.
1. Payroll tax changes
The state will cement payroll tax relief for SMEs that has been offered through tax rebates in the past, meaning businesses with payroll of $1 million or less will be subject to a tax rate of 2.5%.
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The government will also increase the threshold at which the maximum payroll take of 4.95% kicks in, from businesses with a payroll of $1.2 million to those with a turnover of $1.5 million.
2. The banks levy
The state plans to raise $370 million over the forward estimates through its own state-version of the federal government’s bank tax, which will involve banks operating in the state paying 0.015% on liabilities.
Small businesses and experts have expressed concerns that this style of bank tax will inevitably be passed on to consumers. This morning Prime Minister Malcolm Turnbull questioned South Australia’s approach on the issue, raising the question of whether a state-specific levy would drive productivity in the region.
“Is that going to drive investment, support, jobs within that state or is in fact going to make it less competitive?” he asked, reports The Australian.
3. Commitments through the Future Jobs Fund
A new “Future Jobs” pool will be established, comprising of $100 million in grants and $100 million in loans to support businesses in the region across five key sectors, including shipbuilding and defence, tourism, food and wine and information technology.
There’s also an increase in the Jobs Accelerator Grant for businesses employing new trainees and apprentices, with small businesses with payrolls of between $600,000 and $1.5 million eligible for up to $15,000 for each new trainee or apprentice they take on.
The state’s full budget papers can be read here.