Small business has been disappointed by a lack of tax relief in the Victorian state budget, although advocates say they are glad no new taxes have been introduced and support for the construction industry is welcome.
Victorian Employers’ Chamber of Commerce and Industry chief economist Stephen Wojtkiw told SmartCompany no changes to tax was a positive for businesses at the moment, although there will be a push for reform in the future.
“There is always more to be done. There will be strong expectations from business for the government to undertake state tax reforms.”
Yesterday’s Victorian budget revealed a budget surplus of $225 million, which is being applauded by business groups, along with measures to increase infrastructure spending and improve the roads and public transport system.
Victorian Treasurer Michael O’Brien announced the surplus and said by 2016-2017, this will increase to over $2.5 billion.
The new East West Link is the beacon of the Napthine government budget which is dedicating billions of dollars to infrastructure projects. The first phase of the East West Link is expected to cost between $6 billion and $8 billion.
O’Brien said yesterday the infrastructure spending was an investment in “nation-building” infrastructure.
Wojtkiw says the budget has been “steeped fairly heavily in infrastructure”, which will provide a much needed boost for the construction and manufacturing industries.
“We have been pushing for progress in the East West Link and it’s great to see progress on that.”
“The biggest benefit is the fact that this is a budget which focusses on the need to improve Victorian infrastructure. Whether this be the roads or transport system more broadly, it’s important we get work underway as soon as possible,” he says.
As previously foreshadowed, the Napthine government has also increased the first home owner grant for new homes to $10,000 and the new 40% first home buyer land transfer duty concession will be brought forward by six months.
This initiative, according to Pitcher Partners partner Craig Whatman, is aimed at “re-invigorating” Victoria’s residential property market and the urban fringe growth corridors.
But despite the increased funding for first home owners constructing new homes, those looking to buy an already established home are losing their $7,000 grant.
Wojtkiw says there are a number of “high level initiatives” in the budget which will help improve business competitiveness.
“There are a number of other infrastructure projects such as station upgrades, new trains, and station crossing removals. This will support the construction and road maintenance workers,” he says.
The government is dedicating $170 million over three years to repair Victorian roads, $349.8 million to remove three level crossings and $100 million to upgrade the Frankston train line, among other projects.
The Victorian budget also promises to help small business by reducing red tape and dedicating $16 million to drive business innovation over the next four years.
Whatman said in a statement more could be done.
“We would like to have seen a commitment to raising the payroll tax threshold and reducing the payroll tax rate so that small businesses aren’t still caught within the payroll tax net and don’t incur a large payroll tax liability.”
“There also is no mention of relief from other imposts on business such as stamp duty and WorkCover premiums,” he says.
The state government has also dedicated $50.4 to help businesses move into international markets, an investment Whatman says is important.
“Asia is an important growth area for many of our clients who are looking to expand their presence into China and Indonesia.”
“We believe further expansion of the government’s representative in the Asian region will give greater support and create more opportunities for those Australian businesses wanting to expand into Asia,” he says.
Victorian tourism should also receive a boost, as there is also strong support to promote Victorian tourism in China, with the state government pledging $8 million to a China tourism strategy.
Regional tourism will also be boosted by $8 million over four years to increase Victorian visitors to regional Victoria, including $7 million going to redevelop Mount Buffalo Chalet.