In the Victorian Budget 2016-17, local businesses will receive significant tax relief.
The Victorian Government with targeted measures aims to boost businesses, create jobs, and support apprentices and trainees get their qualifications.
The Hon Tim Pallas, Treasurer, said that by increasing the payroll tax threshold for the first time since 2002, the Victorian Government is keeping many small businesses out of the payroll tax net, relieving pressure on business owners and encouraging jobs growth.
“By reducing the payroll tax burden placed on Victorian businesses we’re allowing them to expand, hire more staff, and boost jobs and investment,” said Mr Pallas.
According the government estimate, approximately 36,000 individual businesses across Victoria will benefit from a $286 million payroll tax cut, with the incremental raising of the tax-free payroll threshold from $550,000 to $650,000. Once fully implemented, around 2,800 businesses will no longer pay any payroll tax at all.
“Victoria’s small business sector is the backbone of our economy. This payroll tax cut will go a long way to making sure small and medium sized enterprises are in a better financial position to focus on what they do best – building their businesses and creating jobs for Victorians,” said the Hon Philip Dalidakis, The Minister for Small Business, Trade and Innovation.
The first increase to $575,000 will take effect on 1 July 2016, with incremental increases until the tax-free threshold reaches $650,000 in 2019-20.
Mr Pallas further added - “By the time it is fully implemented, businesses with an annual payroll of between $4.8 million and $31.5 million will have the lowest payroll tax burden in the country.”
Recognising the importance of trainees and apprentices completing qualifications, the Budget also includes a further payroll tax exemption to employers of displaced apprentices or trainees.
Under the new measure, wages paid by employers to a displaced apprentice or trainee will be exempt from payroll tax from 1 July 2016.
Between 4000 to 5000 apprentices and trainees are displaced from their training each year. Providing this exemption will encourage businesses to re-employ those who wish to complete their qualifications.
The Hon Steve Herbert, Minister for Training and Skills, said – “We want to help apprentices and trainees finish their qualifications, and this incentive for Victorian business will give people a better chance to do just that.”
Ensuring that apprentices and trainees get the opportunity to complete their qualifications also strengthens confidence in the value of Victoria’s training programs.
A media release for the Liberal Party of Victoria noted - "This budget has no economic plan and no jobs plan. While the New South Wales economy powers ahead with tens of thousands of new full-time jobs and new investment, Tim Pallas’ budget makes it harder for Victorian families and businesses."
