On Tuesday 24 November, Victorian Treasurer Tim Pallas unveiled the most significant State Budget Victoria has ever seen. The budget is intended to deliver initiatives that support a jobs-led recovery, putting local business and workers first.
Here are summarised components of the budget that most of our clients will be interested in knowing more about.
The full budget summary is available here.
Payroll tax and employee support
- The deferral of payroll tax for businesses with payrolls of up to $10 million for the full 2020-21 Financial Year. Please note this is a deferral not a waiver.
- An increase in the threshold for paying payroll tax on an annual basis from $40,000 to $100,000.
- The Jobs Plan includes an allocation of $836m in payroll tax relief to encourage employees to hire new workers, called the New Jobs Tax Credit. The new jobs tax credit will be available to small and medium enterprises to increase employment by re-hiring staff, restoring staff hours or supporting new jobs. For the next two years, eligible businesses will receive a tax credit of 10 cents for every dollar of Victorian taxable wages above the previous year’s.
- A Secure Work Pilot Scheme to provide sick leave for casual staff – this two‑year pilot will provide up to five days of sick and carers pay at the national minimum wage for casual or insecure workers in priority industries.
- Owners of residential property who provided eligible tenants rent relief may receive a 25% reduction in land tax for the 2021 Financial Year. These owners may also defer any outstanding land tax liabilities to 30 November 2021.
- Vacant land tax for the 2021 Financial Year will be waived where resulting from 2020 property vacancies.
- Owners of property with landholdings below $1m and includes at least one non-resident property can defer their 2020 land tax liability through to 31 March 2021.
- The former land tax concessional rate for land owned and occupied by clubs (social, cultural, recreational) will be replaced from 1 January 2021 with a full land tax exemption.
- 50% land tax discount and an exemption from the Absentee Owner Surcharge will be eligible for build to rent development projects from 1 January 2022.
- Purchasers of residential properties under $1m, purchased before 30 June 2021, will receive stamp duty relief of:
- 50% waiver applicable for new residential properties; and
- 25% for existing properties.
- 50% stamp duty concession will apply for commercial and industrial property transactions in Regional Victoria for contracts entered into from 1 January 2020.
New investment funds including:
- Venture Growth Fund ($25.7m). The Fund will be run by Invest Victoria for injection of late-stage capital into revenue positive startups.
- Angel Sidecar Fund ($10m). To help female start-up founders access capital. The fund is to be run by LaunchVic. The fund will run over 3 years and provide up to $250,000 co-investment into each early stage start up. The fund will invest along side private investment.
- Industry Recovery and Growth Fund ($40m). Funding focused on facilitating private sector investment in advanced manufacturing. This includes targeted investments in high growth sectors like food manufacturing and pharmaceuticals.
- Victorian Startup Capital Fund, ($61m). Aims to unlock private capital to support innovative, high-growth startups and entrepreneurs.
- $80m on a package of targeted investment incentives to attract the best and brightest international companies to Victoria.
Support for exporters
This includes funding for pilot virtual trade missions, establishing a Freight Stabilisation Fund and Global Gateway vouchers to assist exporters identify new export markets.
Cash grants to support small and medium sized businesses. This includes:
- $822m for the third round of the Business Support Fund, building on the first two rounds, which provided funding totalling $1.8bn of support.
- Grants of up to $50 000 for local business groups and chambers of commerce, to assist members to transition to COVID Normal.
- An investment of $44m to equip businesses to thrive in COVID Normal. This includes $20 million for small businesses to access off-the-shelf digital programs, training and work-shops designed to help businesses adapt to online operations.
- The $100m Sole Trader Support Fund to help sole traders in affected sectors.
Research and technology
The Breakthrough Fund will be allocated $2bn to help support research and development adoption and commercialisation, supporting 15 700 jobs over 10 years. This investment will focus on priority industries, including medical research, health and life sciences, agri food, advanced manufacturing, clean energy and digital technologies. A long term investment strategy will be developed by a partnership between industry, research, philanthropic and finance sectors. It will support projects delivered with knowledge institutes and industry stakeholders, anchored at key innovation and employment precincts, including Parkville, Arden Macauley, Fishermans Bend, Latrobe Bundoora and Monash Clayton.
A further $50m for research and development loans. The initiative will provide loan support to SME’s that are eligible for the R&D tax incentive program to borrow their entitlements at low rates of interest. Further details of the initiative are here.
Clean energy initiatives
Supporting new renewable energy zones through grid investment, delivery of the Victorian Big Battery, upgrades to transmission networks and new clean energy generation projects to be facilitated. Total funding of $682m will also attract and fast-track investment in innovative energy projects that will deliver transformational benefits to Victoria, with consumers able to benefit from these projects from 2025.
Should you have any questions or need any help ensuring you receive all available assistance, please reach out to our team and we will endeavour to do our best to assist.
The team at Rose Partners