The Victorian State Government 2021 Budget is a mixed bag for the still-struggling business sector.
“VACC notes that there are no new financial imposts specific to the automotive industry, which is a good start, but there seems to be little else in the budget for business and employment growth,” said VACC CEO, Geoff Gwilym.
While there were some positives for those Victorian businesses trying to recover from the devastating impact of COVID-19, overall the budget appeared to show little consideration for the
business community.
“A reduction in payroll tax from 2.02 percent to 1.2125 percent will benefit approximately 4000 regional Victorian businesses. This is welcome, but Victoria’s payroll tax threshold is one of the lowest in the country to start with,” said Mr Gwilym.
Rather than being business-focussed, the state budget is steered toward supporting Victorians in need, with initiatives including the Andrews Labor Government’s $3.8 billion reform to rebuild the state’s mental health system.
The Mental Health and Wellbeing Levy will see a 0.5 percent surcharge placed on payroll tax for businesses with wage bills over $10 million, and a further 0.5 percent increase for those over $100 million nationally.
However, VACC – the largest automotive apprentice employer in Australia with 500 apprentices – is pleased that apprentice wages are exempt from the above calculations.
“VACC is glad the government has made this move, as this levy would have otherwise seen less young Victorians in training, as organisations would simply not have been able to afford them,” said Mr Gwilym.
The budget reveal, led by Victorian Treasurer Tim Pallas, included a commitment to increase the tax-free threshold on land tax which, from 1 January 2022, shifts from $250,000 to $300,000. The move is welcomed by industry however, other Victorian businesses face an increase in land tax by 0.25 percent for all taxable land holding over $1.8 million, and 0.3 percent over $3 million.
“Industry welcomes the increase in support to struggling Victorians but maintains its position that businesses, which play a key role in the state’s long-term recovery, have been largely left out in the cold,” said Mr Gwilym.
The Chamber has compiled a budget snapshot for member convenience.