From payroll tax relief to $25 dining vouchers: What SMEs need to know about the NSW budget
The NSW government unveils its budget today, with drastic measures intended to boost the state’s ailing economy.
The NSW government unveils its budget today and drastic measures, such as a $39.3 million small business program, intend to boost the state’s ailing economy in an extensive coronavirus recovery plan.
For SMEs, there’s a lot to digest, from payroll tax relief and a $10 million grant program for women, to funds for regional businesses and a curious voucher initiative that will give every adult $100 to spend on hospitality and entertainment.
Here’s what small business owners need to know.
A $39.3 million small business program
The NSW government is pledging $39.3 million to its Business Connect program, in a bid to revive small business across the state.
The funds include the previous $9.8 million allocated in April and will enable the program to run for four years instead of one.
The program offers access to advice and skills training, including on how to build resilience, as well as how to recover from the state’s triple bushfire, drought and pandemic crises.
It’s an investment into the futures of SMEs across NSW, from Broken Hill to Byron Bay and Blacktown, Minister for Finance and Small Business Damien Tudehope said on Saturday.
“Business Connect advisors are located across NSW and can help people start, run, adapt, or grow their small business,” Tudehope said.
Payroll tax relief
The payroll tax threshold will increase to $1.2 million, up from $1 million, delivering what NSW Treasurer Dominic Perrottet said is a tax cut for thousands of businesses to “further support jobs”.
There will also be a temporary two-year reduction in the payroll tax rate from 5.45% to 4.85% from July 2020 to June 2022.
The higher threshold and reduced rate follow NSW Premier Gladys Berejiklian’s decision to have a four-year payroll tax-free period for businesses that create at least 30 new net jobs.
Tendering support for SMEs
The NSW government has allocated $5 million in its 2020-21 budget to help small businesses negotiate government contracts through a tendering support service.
The four-year program, delivered by the NSW Small Business Commission, will help SMEs navigate the government’s procurement processes through advice and training.
Minister for Finance and Small Business Damien Tudehope said the NSW government spends over $40 billion each year on the procurement of goods, services and construction, with nearly half going to SMEs.
“Many small businesses are not aware of the opportunities that exist or are unfamiliar with the NSW government tendering processes,” Tudehope said.
Women back in the workforce
Women will soon be able to apply for grants of up to $5,000 as part of a new Return to Work program.
Premier Gladys Berejiklian said the program, which received $10 million, would provide women with financial assistance, mentoring and training to help them get back to work.
“I encourage women from all walks of life to apply for these grants and use this springboard to jump back into their former career or even start a new one,” Berejiklian said on Monday.
Funds for regional NSW
Regional NSW is set to receive $300 million over two years in a far-reaching fund that aims to support infrastructure, small business and tourism.
Acknowledging the difficulties regional towns have faced over the last few years, Treasurer Dominic Perrottet said the initiative, known as the Regional Growth Fund, will generate “opportunities, investment and jobs”.
$25 vouchers for food and entertainment
Adults in NSW will receive $100 in vouchers to spend at hospitality and entertainment venues in a new stimulus measure designed to get residents ‘out and about’.
Costing the state government $500 million, the Out and About voucher scheme intends to keep the economy flowing post-Christmas.
Anyone over 18 years will receive four $25 vouchers to use in selected COVIDSafe businesses that sign on to the scheme.
“We want to encourage people to open up their wallets and contribute to the stimulus effect,” Treasurer Dominic Perrottet said.
NSW forecasts a 2020-21 budget deficit in the tens of billions of dollars.
However, given the state’s Treasury predicts the unemployment rate will peak at 7.5% in December and drop to about 5.25% in mid-2024, these stimulus measures have a lot of heavy-lifting to do.
