Government cuts payroll tax for small businesses
Small businesses will receive a temporary payroll tax concession of up to 2.45 percentage points, the State Government has announced.
The cut will be in place for the next two years.
This year’s cut will be paid as a cash grant direct to businesses with a total payroll of between $600,000 and $1.2 million, to be paid before the end of the calendar year.
A business with a $1 million annual payroll will save $9800 a year as a result of the move.
The concessions will cost the budget $21.6 million over two years.
Payroll tax is currently set at 4.95 per cent, making the concession an effective halving of the rate.
Announcing the measure this morning, Premier Jay Weatherill said the move was designed to stimulate confidence in the economy.
“The fundamentals are strong across Australia, they’re strong in South Australia. The question though is confidence,” he said.
“This is about trying to shake off the malaise that is existing and actually get some confidence so that people do invest, they do spend, the economy does continue to grow.
You might like
“South Australia’s small businesses are often the backbone of a community, providing jobs and services to local people.
“I know what it is like to start and run a small business. I know how important small business is to our economy.
“That’s why I wanted to assist small business in this, my first budget as Treasurer.
“This gives small businesses an important cash flow benefit in the last half of this year.”
About one quarter of all businesses paying payroll tax in the state would be eligible for the concession, Weatherill said.
Flanked by representatives of five local and national banks, Weatherill told the media he was working with lenders to negotiate special products and concessions for South Australian businesses.
“Some of these are measures that banks are already doing and are seeking to promote, together with out initiative. Others are new initiatives,” Weatherill said.
“I think all of us now agree that now is the right time to promote these measures so that we can actually build confidence.”
Bendigo Bank State Manager Craig Ralston said that as a result of the discussions with the Premier his bank would be rolling out a new education package for small business owners.
He said the bank would also be adding self-service capability at a new branch the bank plans to open in Rundle Mall.
The Premier’s is the latest in a series of measures announced this week ahead of tomorrow’s State Budget aimed at stimulating various sectors of the economy.
The government has this week announced funding to continue the Small Business Innovation Research pilot program, funding for the Industry Participation Advocate, and extra funding for the Small Business Commissioner.
Stay informed, daily
The latest state trend-adjusted GDP figures, released this morning, show the economy contracted by 0.9 per cent in the last quarter, the third successive quarterly decline. National GDP has increased by 0.6 per cent in the same time frame.
In the last year, state GDP has dropped 2.6 per cent.
In front of a large media contingent, and with the Premier standing by, the bankers took the opportunity to promote their wares.
Bendigo Bank’s Ralston was keen to focus on the new branch the bank plans to open later this year.
“We’re delighted to hear the changes made. We think it brings about certainly some positive change for small business owners and hopefully some opportunity for those that are looking to enter and start up small businesses as well.
“We hear a lot of feedback the banks don’t want to lend. I can tell you that’s absolutely not the case. We want to help strengthen and grow the pie in the community, not necessarily get more of the pie.
“We’ve got a flagship branch that’s going to open in and around Rundle Place. We’ve seen Rundle Place is a significant retail precinct.
“We will have a flagship branch that opens in the end of August or early September. We’ve got a couple of parts of that which we think certainly will stand out for businesses and non-businesses.”
Those included prolonged opening hours and a cash management facility for business owners. The bank also plans to open up a new small business advisory centre in Hutt Street.
Business SA chief Nigel McBride reacted positively to the announcement.
“We have told the Government that small business in South Australia needs tax relief and the Premier has taken a step in the right direction by making this announcement today.
“Unfortunately this is not a long term tax cut, rather a temporary reprieve from a high payroll tax regime, but all tax cuts are welcome by business during these tough economic times.
“This payroll tax measure eases some of the pressure but more must be done.
“For small business to survive in our State the Government needs to undertake wholesale tax reform”.
Want to see more stories from InDaily SA in your Google search results?
- Click here to set InDaily SA as a preferred source.
- Tick the box next to "InDaily SA". That's it.
