The budget will provide a $1.7 billion cash flow boost for businesses with payrolls up to $10 million, by allowing them to defer their 2020-21 payroll tax liabilities for up to 12 months.
In addition from 1 July 2021 the threshold will increase for annual payroll tax payments from $40,000 to $100,000. As a result, up to 7,000 extra businesses will now be able to pay their payroll tax annually, rather than monthly, and boosting their cash flow with $309 million in support.
Jobs Tax Credit
Inclusion of $836 million in new jobs tax credits across two years for small and businesses to re-hire staff, restore hours and create new jobs. It will help support an estimated 9,400 people back into employment.
This incentive means Victorian businesses will incur less payroll tax the more they re-hire and employ new staff, by receiving a tax credit of 10¢ for every dollar they increase taxable Victorian wages.
Small & Medium Business Cash Grants
Small and medium‑sized businesses will receive support via $1.1 billion in cash grants. This includes $822 million in the third round of the Business Support Fund and $44 million to enable businesses to adjust to digital requirements following the pandemic with digital programs, training and workshops.
Funding of $189 million to promote business investment in Victoria, including:
- $96 million to establish two venture capital and growth funds to assist businesses that are starting up or expanding
- $80 million on a package of targeted investment incentives to attract the best and brightest international companies to Victoria
- $13 million to promote cooperation in research development and commercialisation
Jobs for Victoria
The Labor Government’s new Jobs for Victoria initiative will receive $619 million to help provide targeted and tailored support for hundreds and thousands of Victorians most affected during the pandemic.
Positions subsidised through the initiative will be focused on creating new ongoing permanent jobs for those hit hardest by the pandemic, to ensure long-term security for workers and their families. One of these includes $250 million to support businesses in hiring at least 10,000 Victorians via 6-month wage subsidies.
Digital Future Now
With the increase in online activity since the pandemic hit, the budget will include $626 million for the Digital Future Now package to support our transition to a digital economy. It will assist businesses by drastically improve mobile coverage and broadband access, particularly across regional areas.
Stamp Duty Waiver
There will be over $293 million invested to fund a stamp duty concession of up to 50 per cent for homes valued at up to $1 million for contracts entered into from 25 November 2020 to 30 June 2021.
Relief will be targeted at newly built or “off-the-plan” homes, which will receive a 50 per cent waiver. Existing homes will be eligible for a 25 per cent waiver.
For businesses purchasing property in regional Victoria, a 50 per cent stamp duty concession on the purchase of commercial and industrial properties will be brought forward to January 2021 – encouraging more businesses to open, relocate or expand.
In addition, land tax discounts of 50 per cent for build-to-rent developments will help boost the construction industry sector in Victoria and provide more choices and alternative for renters.
For the comprehensive 2020-21 Victorian Budget plan you can find it here. To make the most of the Victorian State budget, our team at BLG Business Advisers are here to help so please talk with us today.