The NSW budget, released today, will provide record stimulus to the state, supporting SMEs with commercial rent relief and $1,500 vouchers for businesses that don’t pay payroll tax.
It is the first time in six years the state’s budget is in the red — with a $16 billion deficit.
Acknowledging the triple blow of the drought, bushfires and pandemic, Treasurer Dominic Perrottet called COVID-19 “a one-in-one-hundred-year economic event”.
“We are investing where it matters to make sure there are as many people in work [as possible],” Perrottet told reporters on Tuesday.
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In a bid to stop small business owners from leaving or being evicted from their premises, the budget will provide land tax relief to landlords.
Landlords can receive land tax relief of up to 50% in the 2020 land tax year. To be eligible, commercial tenants must have a yearly turnover of under $50 million.
The NSW government will also extend commercial rental relief for retailers to 2021, albeit at the lower level of 25%. To qualify, commercial tenants must have faced at least a 30% reduction in turnover because of the pandemic.
This relief will be provided as a grant payment and is forecast to cost the government about $450 million.
CPA Australia general manager of external affairs, policy and advocacy Jane Rennie said extending commercial rent relief for a further three months and targeting smaller retailers is an appropriate measure at this stage of the state’s economic recovery.
“The targeting of commercial rent relief to smaller tenants from January 1 is good for small retail businesses, but less helpful for small landlords,” Rennie added.
The budget will also overhaul payroll tax — and offer digital vouchers to small businesses to which payroll tax doesn’t apply.
Costing the government $472 million, these digital vouchers will be:
- Available to SMEs in New South Wales that don’t pay payroll tax;
- Capped at $1,500 per business, and be used towards the cost of any government fees and charges;
- Accessible online through the MyService NSW portal and work as a rebate, meaning a claim for the voucher is made after the fee has been paid; and
- Available for use from April 2021 to June 30, 2022.
Larger businesses will benefit from a temporary two-year reduction to payroll tax of 4.85%, down from 5.45%. The threshold for when the tax must be paid will be permanently raised to $1.2 million, up from $1 million.
Other budget spending intended to help small business cashflow includes the state’s ‘Out and About’ vouchers, which will see all adults receive $100 worth of vouchers to spend at hospitality and entertainment venues.
There is also the Business Connect program, which has received a colossal $39.3 million to support businesses.
Economic stimulus targeting SMEs specifically is one focus of the NSW government’s extensive economic plan, with other measures ranging from changing stamp duty on properties to an annual tax to big infrastructure and energy projects.