$4 billion dollar stimulus spend and a focus to create and save jobs

On Tuesday 10 November, the Treasurer of South Australia, Rob Lucas, handed down the 2020-21 SA State Budget.  As expected, the focus of the budget is targeted spending to create and save jobs.  There has been a record spend announced on infrastructure of $16.7 billion along with a $4 billion stimulus spend.  Spending in health, SA Police, education and training, tourism and hospitality and responses to COVID-19 and the bushfire recovery has also been announced.

The budget deficit for last year was $1.49 billion. This year it will increase to $2.59 billion and $1.42 billion next year.  The State Government is hoping to get back to into surplus in 2023-24 financial year.  However, even though the debt will increase significantly, interest costs will be less than previous estimates due to record low interest rates.

For South Australian businesses, announcements were made with regards to payroll tax, Small Business Grants and land tax relief.

Payroll tax

  • For businesses with annual Australian grouped wages less than $4M, the payroll tax waiver has been extended another six months, to June 2021, meaning these eligible businesses will have had payroll tax waived for a period of 15 months
  • For businesses with annual Australian grouped wages of more than $4M who are eligible for JobKeeper for the March 2021 quarter, there will be a payroll tax waiver for the period from January 2021 to June 2021
  • There will be extended repayment arrangements available for businesses who have deferred payroll tax between the period of April 2020 – December 2020
  • The payroll tax exemption for JobKeeper payments will remain
  • There will be a payroll tax exemption on wages paid to new apprentices and trainees for the first 12 months where they commence training with an employer from 10 November 2020 to 30 June 2020

Small Business Grants

  • A second round of the Small Business Grants program has been announced providing a $10,000 grant to SA small businesses that employ staff providing they are still receiving JobKeeper
  • This has been extended to include a $3,000 grant for sole traders who operate out of commercial premises
  • here is a link to the full eligibility requirements along with the application form

Land tax

  • Further land tax relief was announced for taxpayers impacted by the new aggregations rules. The land tax transition fund will now pay 100% of the relevant increase in the taxpayer’s land tax assessment for 2020-21, up from 50%
  • Relief under the land tax transition fund can be applied for when the 2020-21 land tax assessments have been received by land holders

If you have any questions in relation to the above, please contact your Holman Hodge adviser.