Stay up to date with the latest COVID-19 news. Learn More

Insights

NSW State Budget 2020/21 from the Business Perspective

Written by Sarah Pogson . December 04, 2020
3 min read

The NSW Treasurer, Dominic Perrottet released the 2020-21 State Budget on Tuesday 17 November, 2020.

Following three back-to-back crises from the end of 2019 through to 2020 with drought, bushfires and the COVID-19 pandemic, the NSW Government has provided $29 billion in health and economic support. This included almost $6.4 billion in tax relief, and more than $860 million in grants.

This budget is focused on long-term economic reform with tax cuts across a number of areas, including payroll tax, small business vouchers, job creation and more. We go into the main highlights that relate to your business below.

Payroll Tax

The NSW government previously brought forward the increased payroll tax threshold by one year to $1 million in response to the COVID-19 pandemic. A further permanent increase to the payroll tax threshold was announced as part of the budget, taking the threshold up to $1.2 million from 1 July 2020 onwards. The payroll tax rate will reduce from 5.45% to 4.85% for two years from 1 July 2020.

These changes to the payroll tax threshold will ensure that many small and medium businesses will not be liable for payroll tax, and the rate cuts will reduce the burden on those businesses that still are. Even with this in mind it is important for business owners to consider all aspects of their payroll tax position, from wages paid in other states through to contractors.

Small & Medium Business Assistance

For government fees and charges that small and medium businesses need to pay, those that are under the payroll tax threshold will be provided with a $1,500 digital voucher to cover this.

Jobs Plus

A new Jobs Plus Program aims at encouraging domestic and international business into NSW. It will support companies who want to relocate their head offices to NSW or expand their number of jobs held in NSW, with the aim to create or support 25,000 jobs to 30 June 2022. The program includes up to four years of payroll tax relief for every new job created where a business has created 30 or more new net jobs.

Regional Growth 

Investment into businesses in regional NSW include:

  • $100 million in grants to the Regional Jobs Growth Fund to enourage investment, expansion and increase customers and jobs.
  • $300 million over two years to the Regional Growth Fund for new economic development and job creation programs.

Tax Reform

The government is providing additional investment across a number of reforms over the long-term including a tax reform for what they consider an ‘inefficient’ property tax system. Aiming to lower barriers to home ownership and boost long-term growth, public feedback will be sought over the coming months on possibly transitioning away from the current transfer duty and land tax system.

An overview of what other areas the budget is investing in can be found here. For guidance on making sure you maximise the opportunities in the NSW budget, our team at BLG Business Advisers are here to help so please talk with us today.

*This information is correct at the time of publishing and is subject to change.*
Written by Sarah Pogson . December 04, 2020
Covid-19 Resource Centre

Keep up to date with the Coronavirus.

Covid-Resource-Centre
Access Resource Centre

Are you ready to speak to a business adviser?

Let us show you how we can help.

If you’re more of a talker we’d love to chat, call us on 02 4229 2211

Talk with us

mail (1)

Get business advice that helps you, no matter what stage of business you’re in.

Yes, an email that matters!