New South Wales Treasurer Dominic Perrottet has delivered the 2020-21 Budget with the focus being on creating jobs and securing the future amidst the COVID-19 pandemic. He has praised the NSW response to the pandemic highlighting the employment and business confidence rebound in the four months to September.
In his speech, the Treasurer said, “Our economy is expected to contract by ¾ of a percentage point in 2020-21, before rebounding to growth of 2 ½ per cent in 2021-22, and strong growth in the outer years.”
The key points within the budget are summarised below.
Payroll tax
From 1 July 2020 to 30 June 2022, the payroll tax rate will be reduced from 5.45 per cent to 4.85 per cent. At this stage, this reduction is only a temporary measure with the payroll tax rate reverting to 5.45 per cent on 1 July 2022.
The payroll tax threshold will increase to $1.2 million from 1 July 2020, up from the current threshold of $1 million.
Stamp duty
The government has opened the door for major reform to stamp duty law. They are seeking feedback on a proposed model that would give property buyers the choice of foregoing stamp duty on purchases in favour of an annual property charge. This would assist home buyers to overcome the hurdle of paying stamp duty up front on the purchase of property.
We will update you on this as the government progresses with its feedback process.
Land tax
The COVID-19 land tax relief for landowners has been extended to 28 march 2021 in a modified form. To be eligible for relief from 1 January 2021 to 28 March 2021, applicants need to meet the following conditions:
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Lease must be a retail lease
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Annual turnover of the tenant must be less than $5 million, and
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The tenant must have had a 30% decline in turnover (or 15% for not-for-profit) for the December 2020 quarter
Out and about scheme
From late January 2021, NSW residents aged 18 years and older will be eligible to receive four $25 digital vouchers for a total cap of $100 each person. These vouchers which will be divided into two categories:
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Dining out – two vouchers ($50 total) can be used to purchase food at restaurants, cafes, pubs and clubs.
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Going out – two vouchers ($50 total) can be used for activities such as visiting cultural institutions, performing arts, cinemas and amusement parks.
It is important to note that the vouchers cannot be used for gambling or to purchase alcohol or tobacco.
The vouchers will be accessible through the MyService NSW account to be used at eligible businesses that have a COVID safety plan and are registered as COVID safe.
Eligible businesses must have been trading with an active ABN at 31 October 2020 and be registered for GST.
Small and medium-sized business
Small and medium-sized businesses that do not pay payroll tax will be eligible for a $1,500 digital voucher to use towards the cost of government fees and charges. The voucher is capped at $1,500 per business and will be available to use from April 2021 to June 2022.
The scheme will operate as a rebate, where a claim can be made through the MyService NSW portal after the government fee and/or charge has been paid.
Infrastructure
The Budget commits a record $107.1 billion to the Government’s infrastructure program over the next 4 years. This includes:
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$10.4 billion for the Sydney Metro West
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$9.2 billion for the Western Sydney Airport
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$2.2 billion for the Sydney Gateway project linking Sydney Airport and Port Botany with the WestConnex St Peters Interchange
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$10.7 billion in health infrastructure, and
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$7.7 billion in Education and Skills infrastructure.
Regional New South Wales
Funding has been allocated toward health and economic stimulus measures designed to support regional areas including:
Jobs Plus Program
Domestic and international businesses are encouraged to expand within NSW through payroll tax relief and other measures such as assistance with planning and providing enabling infrastructure. Where at least 30 new jobs are created, payroll tax relief will be granted for up to four years on those newly created jobs.
Education, training and return to work
The Government has committed significant funding to training, skills and education including:
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$318.6 million to upskilling and retraining workers and those entering the workforce;
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$80 million for infrastructure apprenticeships and public sector cadetships;
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$57.4 million to address skills shortages and support the employment of women;
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$337 million to deliver intensive tutoring for up to 290,000 students supporting students who lost learning time as a result of COVID-19 shutdowns; and
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$120 million to extend the free preschool program.
To assist women affected by the pandemic in getting back into paid work, the government will setup a $10 million Return To Work program. The program gives women one-off grants of up to $5,000 to cover the financial obstacles of getting back into work and can include costs such as:
To be eligible for the funding, women must be affected by the pandemic, be residents of NSW and plan to start paid work within six months.
Those who may be eligible for the grant can register through the Revenue NSW website by providing their name and email address.