Undeniably 2020 will be remembered as a topsy turvy year that has forced many state and territory governments to postpone their annual budget announcements until the end of the year. But in a case of “it is never too late”, Australia’s regional governments made support for small business a centerpiece of their recent budget announcements.
Payroll tax rate cut in NSW to jump-start jobs
The $2.1 billion reductions of payroll tax for 2020-21 and 2021-22 is the lynchpin initiative for small businesses from the NSW Budget announced in late November. Under the change, the payroll tax rate falls from 5.45% to 4.85%. Businesses are entitled to immediate tax savings as the lower rate applies retrospectively from 1 July 2020.
Other budget measures[i] to support SMEs include:
- An increase in the payroll tax threshold to $1.2 million from $1 million.
- $500 million for a flagship ‘Out and About’ program giving $100 worth of digital vouchers to NSW residents to spend at restaurants, cafes and on arts and tourism attractions across NSW to boost businesses and encourage people to spend locally.
- $472 million for new $1500 digital vouchers which can be used by small businesses under the payroll tax threshold towards the cost of government charges.
- A $39.3 million boost for the Business Connect program which has been extended for a further three years to support small businesses across the state to access targeted business advice.
The NSW Government also pledged $5 million for the Small Business Commission to establish a new tendering support service under a four-year program, providing SMEs with practical tips and assistance to prepare and submit government tenders.
More tools and tax breaks for business growth in Victoria
The Victorian Budget 2020/21 also announced in late November had a strong focus on giving SMEs more tools to help them adapt and adopt new digital technology, as well as ongoing business advice[ii].
The $6 million Small Business Support Toolkit, for example, will fund best-practice workshops, mentoring and coaching services across the state – helping businesses to digitise and innovate.
The Labor Government will support at least 1,000 businesses with high-growth potential to reach new markets and create new jobs through the $5 million Ready for Growth Initiative. These businesses will be offered tailored training in digital engagement to help them develop better products and services.
Mental health and wellbeing support for SMEs was addressed with the Victorian Government pledging $26 million for the Wellbeing and Mental Health Support program. This program provides training for business chamber staff to then share with local businesses, expanded a support hotline service and paid for mental health professionals to be embedded in industry and business associations.
There were tax incentives, including the New Jobs Tax Credit, which supports SMEs that rehire staff, restore hours or create new jobs.
Under the plan, these businesses will get a tax credit of ten cents for every dollar it increases taxable Victorian wages. This support is in addition to the more than $1 billion in payroll tax refunds and waivers the Victorian Government has provided since the pandemic began[iii].
Backing business to create jobs the key focus of SA Budget
In South Australia, companies taking on new apprentices and trainees will have the associated payroll tax on those eligible positions waived for 12 months in a significant boost for local skills training and jobs in the wake of COVID-19[iv].
This significant tax incentive announced in the State Budget 2020-21 will apply for apprentices and trainees who commence a relevant contract of training between now and June 30 next year. The measure could potentially save businesses up to $3,600 over the year if they employ two apprentices.
The SA budget also includes an additional $88 million over two years to deliver more training through the JobTrainer Fund National Partnership Agreement with the Commonwealth. This collaboration builds on the existing Skilling South Australia initiative, which is driving growth in apprenticeships and developing a sustainable training system, through the $192 million Skilling Australians Fund National Partnership with the Commonwealth.
Also, the government has pledged $5million for a business advisory service to support SMEs to access personalised business advice, and the government will provide vouchers up to $10,000 to assist at least 500 SMEs to gain access this program.
Additionally, there will be $10,000 cash grants targeted at businesses who employ staff and continue to be impacted by COVID-19 as well as $3,000 cash grants for companies that don’t hire staff, are eligible for JobKeeper and operate from commercial premises.
Territory Jobs Plan
Also, in November the Northern Territory Government handed down its 2021 Budget with job creation at the core of its support for SMEs[v]. This support included:
- The $ 7.8 million Small Business JobMaker Booster that aims to fill the gaps in the Australian Government’s JobMaker program by addressing specific hiring needs for new workers shifting to the Northern Territory.
- The $4 million Small Business Pivot Grant that will help SMEs affected by COVID-19 adapt to the new economic environment and reach new markets.
- The $5 million Small Business CX Grant, which is a one-off grant for SMEs looking to enhance their customer experience.
- The $4 million Small Business Roadhouse to Recovery Grant will help assist motels and roadhouses to improve their visitor experience with grants of up to $150,000 to support infrastructure improvements.
The NT Government also announced a $5 million Small Business Saver grants to assist local small businesses to reduce their ongoing costs, as well as the Small Business Supply Chain Solver. This program aims to assist businesses experiencing difficulties with supply chain challenges caused by COVID-19.
Finally, the government pledged $2 million to support a Small Business Financial Fitness Fund. This funding aims to support businesses to access financial sustainability training programs specific to their needs.
Ensuring small business remains Tasmania’s economic powerhouse
In its November budget announcement, the Tasmanian Government promised $20 million for the COVID-19 Small Business Sustainability and Recovery Assistance Package.
This package includes the Small Business Sustainability and Recovery grants which were awarded to 1,890 businesses, as well as the Event Infrastructure and Critical Support Small Business Grant program, and $1 million to provide mental health support to Tasmanian small businesses and their employees.
The 2020-21 budget also includes a range of significant initiatives designed to create jobs, stimulate the economy, and support small business. This investment includes $5 billion to build more homes, better schools, roads, bridges, irrigation systems, dams, as well as renewable energy assets and health and justice facilities.
More than $22 million will be invested to drive job opportunities for apprentices, trainees, and youth employees. This will be achieved by extending the current payroll tax rebate for all youth employees for a further 18 months, extending the current payroll tax rebate for apprentices and trainees for a further 12 months and extending both rebates to all industry sectors. The government also extended the Targeted Apprentice and Trainee Grant for Small Business to include any small business who employs an apprentice or trainee until 30 June 2022.
Queensland – Big plans for Small Business
In early December, the Queensland Government announced its $140 million Big Plans for Small Business strategy funded in Budget 2020-21 to lift competitiveness and resilience[vi].
The strategy will support private investment with an initial $100 million that will invest in SMEs that have significant growth potential and will create Queensland based jobs. This funding can support businesses to grow and expand into new markets – including export markets – and will be managed by Queensland Investment Corporation.
The strategy also includes $30 million for increasing skills and capability including small business grants focusing on priority industry sectors, as well as grants to assist regional exporters to develop new markets. This funding will also finance the development of a Business Ready Website and the ongoing Small Business Month and Queensland’s Mentoring for Growth programs. It will also support a study to link government procurement of new fibre networks with increased access for small businesses to high-speed broadband in the regions, as well as a Summertime Taskforce to support businesses to be more COVID-safe and move outdoors.
The final $10 million of investment will be used to make the Small Business Commissioner in Queensland a permanent concern, and to reinvigorate the Small Business Advisory Council.