Three Australian governments have handed down their budgets for 2011-2012, with some states and territories faring better than others as payroll tax and business innovation emerge as hot topics.
Victorian businesses have criticised the Baillieu Government’s first state budget, which reveals payroll tax revenue is expected to increase from $923 million next financial year to an estimated $1.03 billion in 2014-15.
In the same four-year period, the Government’s investment in business and innovation is expected to dwindle from $50.2 million to $17.8 million.
Wayne Keller-Thomson, chief executive of the Victorian Employers’ Chamber of Commerce and Industry, says he is disappointed in the lack of tax relief, arguing there are “very few bright spots” in the budget for business.
In the lead-up to the budget, VECCI lobbied the Government to cut payroll tax to 4.85% in 2011-12 and outline a timetable for further reductions in the years to 2015.
VECCI has also called for the payroll tax threshold to be increased to $700,000 to exempt small businesses and start-ups.
Victorian Treasurer Kim Wells has said while the budget doesn’t consist of “quick fixes or easy answers”, it is upfront about the state’s economic challenges.
The Government has pledged $12.4 million over four years to help Victorian exports cope with the record high Australia dollar, and has allocated more than $9 million for skilled and business migration to address the skills shortage.
While Victorian businesses come to grips with Baillieu’s no-frills approach, small business owners in the Northern Territory appear be the biggest beneficiaries of their government’s 2011-2012 budget.
From July 1, the payroll tax rate for NT-based businesses will be reduced from 5.9% to 5.5%, while businesses that pay less than $1.5 million per annum in wages will be exempt from the tax altogether.
Northern Territory Treasurer Delia Lawrie said earlier this week the Northern Territory is the lowest taxing jurisdiction in the country for SMEs.
However, the measures will come at a cost, with the Government’s debt predicted to hit $2.2 billion in 2013-14, despite its previous goal to reduce debt over four years.
While the Government does want to reduce the deficit to $195 million by 2014-15, Lawrie couldn’t confirm whether there would be a return to surplus.
“While Australia and the [Northern] Territory dodged the worst of the global financial crisis, its effects continue with further reductions to GST revenues, limits on credit affecting business activity and, as a consequence, the territory’s own source revenues,” Lawrie said.
According to the Treasurer, any move to return to surplus now would cost jobs and hurt the territory’s economy.
Finally, the ACT Budget for 2011-2012 has been described as modest, but it seems business innovation and skills are a government priority.
According to the ACT Government, the budget will deliver $10 million over four years for initiatives that build business innovation and strengthen the territory’s profile as an investment hub.
“This funding continues the delivery of specialist business advisory services aimed at accelerating the development of technology‐based and creative businesses and dollar‐for‐dollar grants to help emerging businesses turn their innovative ideas into economic opportunities,” the Government said.
“The profile of Canberra as a premier business event destination will be boosted with $1 million over three years to help the Canberra Convention Bureau to attract business events to the city.”
Minister for Education and Training Andrew Barr said the budget will also deliver $3.6 million for the Canberra Institute of Technology.
Meanwhile, Canberra has announced a new $3 million fund to assist research from the lab to the marketplace, aimed at start-ups, entrepreneurs and ACT-based research institutions.
The Australian National University Discovery Translational Fund is expected to transform technology-based concepts to viable investment opportunities, with candidates eligible for grants of between $25,000 and $100,000.
The launch coincides with the opening of the university’s new innovation complex where students, academics and businesses can interact.
At the launch of the event, ANU vice-chancellor Ian Young said the university would now be able to support breakthrough discoveries and new ideas under one roof, and hoped the new innovation hub would serve the local and national innovation community.