Impacts on small business in SA
On Tuesday 4 September 2018 the Treasurer Rob Lucas released the first Liberal Budget after 16 years in Opposition. We perhaps expected to see a budget with harsher cuts, however the Marshall Government seems intent on driving efficiency within the public sector where they can while still supporting infrastructure and jobs growth with the overall hope to provide better outcomes for SA.
For small business, the budget provides some real relief in the form of payroll tax reform, land tax changes and a reduction in the Emergency Services Levy.
The payroll tax threshold has been raised to $1.5 million meaning that approximately 3,000 businesses will no longer have to pay payroll tax. There will be a progressive transition up to a $1.7 million threshold, however businesses with a payroll over $1.7 million will still have only the first $600,000 of payroll exempt from the tax. These changes will apply from 1 January 2019.
We expect that this will provide a number of our clients with payroll tax relief which will be welcomed.
The issue remains for those with a payroll near or above $1.7 million that any incremental increase in payroll costs will come with the additional cost of payroll tax.
The tax-free threshold is increasing from $369,000 to $450,000 from 1 July 2020 and a new 2.9% rate has been introduced for land ownerships valued between $1.2 million and $5 million. This should result in more than 50,000 land owners having a reduced land tax liability with around 8,000 no longer having a land tax liability at all.
Job accelerator grant
The Job Accelerator Grant was available to businesses who registered between 1 July 2016 and 30 June 2018. The Job Accelerator Grant provided a $10,000 payment (made in two $5,000 payments over two years) where business could show they had created and maintained new positions within their business. This grant was not extended in the budget.
- More than $200 million has been committed to support the creation of 20,800 traineeships and apprenticeships over the next 4 years
- Infrastructure spending of $11.3 billion has been committed to over the next four years
- There will be a reduction in the Emergency Services Levy
- A South Australian Productivity Commission will be established
- Approximately 4,000 jobs within the public sector will be cut over the next four years
- A number of industry funds and grant programs have been replaced by three specifically targeted funds – the Economic & Business Growth Fund, the Research, Commercialisation and Start-up Fund and the Regional Growth Fund
If you would like any further information in relation to the above, please contact you Holman Hodge adviser.