NSW Treasurer Daniel Mookhey handed down the 2023-2024 state budget on Tuesday, presenting a significant shake-up to a $700 million innovation fund established by his predecessors while taking the razor to the state’s tourism promotion department and EV incentives.
Here’s a quick rundown of the measures included in the document.
The Future Economy Fund, which received a $703.4 million commitment in the Perrottet government’s 2022-23 state budget, will endure a “reprofiling”, according to the budget documents.
The fund, which former Treasurer Matt Kean said was “aimed at the full life cycle of innovative, high-growth business in priority sectors and drive productivity in emerging high-value industries”, will now undergo “reprioritisatation”.
Unallocated grant funds will be used to underwrite 1,000 new apprenticeships.
Earlier, the state government also confirmed $188 million in programs led by Investment NSW, Destination NSW, and Create NSW, which were cut by the Coalition earlier this year, will not enjoy new funding.
Labor’s comprehensive spending review has resulted in cuts to Destination NSW, the government agency tasked with promoting tourism and events within the state — and, by extension, supporting the small businesses that operate in and around the sector.
Total revenue of $382 million in 2022-2023 has been worked down to $273 million in the 2023-2024 budget.
Calls to reduce the base payroll tax rate, or add a regional-specific tax rate like in Victoria, are not reflected in the budget papers.
In fact, the state government revenue is projected to increase by $14 billion over the four years to 2026-27, in no small part due to “stronger” payroll tax receipts than first projected.
Payroll tax estimates have been “revised upward by $2.8 billion over the four years to 2026-27 since the 2023 Pre-election Budget Update, driven by strong demand in the labour market and rising wages,” the papers state.
“Additional investments in the compliance systems of Revenue NSW” are slated to increase payroll tax revenue by $337 million through to 2026-2027.
Some exemptions included under the Future Economy Fund have also been removed.
“The subprogram was estimated to provide $50 million in payroll tax exemptions over the four years to 2026-27.”
The budget makes good on Labor’s pre-election pledge to establish the NSW Business Bureau, a body it claims will help small businesses engage with government regulation, procurement pathways, and grant applications.
The body will also assist small businesses as they attempt to enter overseas markets.
$13.8 million will be directed to initiatives designed to improve the participation and empowerment of women in the workforce, budget papers show.
A Working Women’s Centre — foreshadowed by Labor ahead of the March election — will be established to assist women facing sexual harassment, underpayment, wage theft and parental leave constraints.
Additionally, the budget includes funding for a Future Women’s Jobs Academy.
In an effort to make training slightly more accessible for apprentices — and to make apprentices more accessible to employers — the state government will provide a $100 vehicle registration rebate to first and second-year apprentices.
Private motorists will face a new $60 weekly toll cap from January 1, 2024, but businesses can also expect a toll reduction through a 33% cut to the truck toll multiplier on the M5 East and M8.
Overall, the $615 million program marks what the state government calls the “first step towards comprehensive toll reform”.
“Duty relief on corporate reconstructions will change,” the papers state.
“The transfer of assets between the members of a single corporate group for the purpose of restructuring is exempt from transfer duty under certain circumstances.
“This exemption for corporate reconstructions will be replaced with concessional duty charged at 10 percent of the duty otherwise payable, applying to transactions occurring on or after 1 February 2024.”
As expected, the state government has revamped its EV incentive strategy, which was widely tipped as one of the most welcoming in Australia for EV owners.
From January 1 next year, stamp duty exemptions and rebates for EV purchases will end.
Transitional arrangements will cover some EV buyers who sign on to buy an EV before that point.
The state government has also flagged changes to how EVs interact with the Road User Charge.
“The liability for the Road User Charge (RUC) will also change so that all zero and low-emissions vehicles (including plug-in hybrids) registered for the first time or transferred from 1 January 2024, will be liable to pay the RUC from the earlier of 1 July 2027 or when EVs amount to 30 percent of new vehicle sales,” the papers add.
Those changes are expected to kick up $260 million in savings for the government, which will go towards its revised EV strategy and plans to boost the supply of charging infrastructure.
Small businesses in the construction sector are likely to come under the purview of the new NSW Building Commission, which the budget papers posit as a “single body to oversee the regulation, licensing and oversight of the building construction industry to support high-quality housing and protect home buyers”.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
