The NSW Government’s 2020/21 Budget, announced by Treasurer Dominic Perrottet, has pledged to continue to support SMEs impacted by COVID-19 with policies to make it easier to run, re-build, and attract investment for a business as well as create jobs for the future.
Job creation is front and centre with a record $107 billion infrastructure pipeline targeting shovel and screwdriver-ready projects, while a skills and training blitz will help people get back into the workforce after this year’s significant job losses. For SMEs, some of the headline announcements involve payroll tax cuts, procurement opportunities, and the support for businesses in the hospitality and arts sectors.
Here’s what’s in store for NSW’s small business community, in addition to the Federal Budget announced last month.
Payroll tax cuts
From July 2020, this Budget will reduce the payroll tax rate in NSW from 5.45% to 4.85% for two years – the equal lowest headline rate in the nation. In his keynote speech, Treasurer Perrottet said, “We will permanently raise the threshold to $1.2 million, almost double Victoria’s.
“These changes mean around 36,000 businesses will save on average $34,000 each year for the next two years – including 3,500 that will pay no tax at all. This adds to the thousands of businesses who have already benefited from our changes.”
In May 2020, the NSW Government brought forward by one year the increase in payroll tax threshold to $1 million.
The Budget also commits $472 million to provide small and medium-sized businesses, which do not pay payroll tax, with a $1,500 digital voucher for the cost of government fees and charges.
Small businesses procurement to drive jobs and recovery
SMEs will have greater opportunities to provide their goods and services to the NSW Government with the Budget delivering $5 million to establish a tendering support service.
Minister for Finance and Small Business Damien Tudehope said the NSW Small Business Commission would deliver a four-year program to support small and local businesses to submit tenders and negotiate Government contracts[i].
“The NSW Government spends more than $40 billion each year on the procurement of goods, services and construction, with nearly half of that amount going to small and medium businesses,” Mr Tudehope said. “However, many small businesses are not aware of the opportunities that exist or are unfamiliar with the NSW Government tendering processes. They will benefit from additional guidance and support.
“Small businesses make up 97.5% of businesses in NSW, and by generating more work for local and small businesses through existing Government spending, we will support jobs, families and local communities.”
Stimulus for SMEs in hospitality and culture
The NSW Government will inject up to half a billion in the Out and About voucher program to stimulate spending in the local economy, including restaurants, visitor sites and cultural attractions. Every adult resident will be eligible to claim up to $100 in digital vouchers to spend on eating out and entertainment.
This stimulus measure will get money flowing into industries hit hard by the pandemic. It will generate jobs and give the people of NSW a great reason to support their local businesses who need a boost.
Trade and investment
The NSW Government will encourage domestic and international business into NSW through payroll tax relief and other support as part of a new $250 million Jobs Plus Program.
The Jobs Plus Program aims to create or support 25,000 jobs to 30 June 2022 and will support companies who want to relocate their head offices to NSW or expand their jobs footprint in NSW. It includes payroll tax relief, up to a four-year period, for every new job created where a business has created at least 30 new net jobs.
The Budget will also invest:
- $100 million in grants to the Regional Jobs Growth Fund to incentivise businesses in regional NSW to invest, expand their operations, get new customers through the door and create new jobs.
- $300 million over two years to the Regional Growth Fund to deliver an extra new round of economic development and job creation programs such as Stronger Country Communities program.
The Government will continue to build NSW’s presence on the global stage with a commitment of $179.8 million to grow the Trade and Investment network offshore to support NSW businesses in key international markets such as Tokyo, New York, Mumbai, Singapore and Shanghai.
The NSW Government will invest $15 million in a partnership with the City of Sydney to help revitalise the Sydney CBD and help a business get back on their feet, including through promoting outdoor entertainment and al fresco dining.
Business Connect Program
The Budget will extend funding of $39.3 million for the Business Connect program, so more businesses can get the advice they need. During 2020, Business Connect has helped more than 10,000 businesses navigate the challenges of COVID-19.
Get in touch today to find out about OnDeck’s funding options that could support with finance for your SME’s recovery planning.
Prepared by OnDeck Capital Australia Pty Ltd ABN 28 603 753 215 (“OnDeck”) for general information purposes only. Content may belong to or have originated from third parties and OnDeck takes no responsibility for the accuracy, validity, reliability or completeness of any information. Information current as at November 2020. You should not rely upon the material or information as a basis for making any business, financial or any other decisions. Loans issued in Australia are subject to the terms of a loan agreement issued by OnDeck. Loans are subject to lender approval. OnDeck® is a Registered Trademark. All rights reserved.