William Buck’s Business and Tax Services teams have summarised the SME business support provided for in the Victorian Government’s big spending 2021 budget, which was released on 24 November 2020.
The government’s support of Victoria’s Small and Medium businesses is crucial to increase business confidence and assist with economic recovery over years to come. The key items that SME’s need to know are outlined below.
New measures announced
- New Jobs Tax Credits: For 2020-21 and 2021-22, SME businesses that re-hire employees, restore employee hours or create new jobs will be entitled to a Payroll Tax Credit of 10 cents for every $1 of increase in taxable wages. With the current Payroll Tax Rate of 4.85%, the 10 cent credit means eligible businesses will pay no payroll tax on their increased wages and the remaining credit will subsidise the business’s existing payroll tax costs.
- Payroll Tax annual payment threshold increase: From July 2021, businesses with payroll tax bills of up to $100,000 will be entitled to pay their payroll tax annually, rather than quarterly, therefore providing cashflow support. This annual payment threshold is an increase from the existing $40,000 threshold.
- Small business solar rebates will be provided to eligible small business under the existing Solar Homes program.
- $2 billion Breakthrough Victoria Fund – The State government will establish this fund to position Victoria as leader in research and technology by supporting medical research, health & life sciences, agri-food, advanced manufacturing, clean energy and digital technology businesses with research and development, technology adoption and commercialisation. Refer to our more detailed article here.
- Jobs for the Victoria Initiative, which includes $250 million to fund a proposed six month wage subsidy to support the hiring of 10,000 Victorians as employees. This initiative includes $150 million dedicated towards hiring 6,000 female workers, with $50 million of that supporting the hiring for females >45 years of age.
- Various programs and funding to support Apprenticeships in Victoria.
- 2 year pilot program to be developed to provide up to 5 days of sick & carers pay for workers in industries with high rates casualisation, for example cleaners, hospitality staff, security staff, supermarket staff and aged care workers.
These measures are only announcements thus far and we expect more information to be released regarding their conditions and eligibility in the coming weeks.
Existing support measures
And don’t forget the business support measures that were announced throughout March to September this year!
Business Survival Package
- For eligible businesses – a third round of Business Support Fund grants between $10,000 and $20,000. The eligibility criteria appear to remain unchanged from the second round of grants earlier this year. Applications closed on 23 November 2020.
- Grants between $10,000 and $30,000 for licensed venues such as pubs, clubs, hotels, bars, restaurants and reception centres based on their capacity and location. Invitations closed on 23 November 2020. Invited applicants have until 30 November 2020 to apply.
- Competitive grants program to assist business chamber and trader groups in providing support to their member groups. Applications closed on 12 October 2020.
- For Alpine businesses – a grant up to $20,000 to assist these businesses meeting service charges of Alpine Resort Management Boards.
Business Adaptation Package
- For sole traders and small businesses – a voucher program to assist these businesses in going digital and adapting to a digital marketplace. Applications open until 28 February 2021.
- For small and local businesses – expansion of the ‘Click For Vic’ campaign.
- For Victorian exporters – assistance in solving export supply chain issues and opening new trade channels
Waivers, Discounts and Deferrals
- For acquisitions of commercial or industrial property in regional Victoria from 1 January 2021, a discount of 50% on any Stamp Duty liability.
- For businesses with annual payrolls up to $10 million – deferral of Payroll Tax for the full 2021 financial year. *Note: this is a deferral only and the payroll tax will still need to be paid at some point in the future.
- Waiver of Vacant Residential Land Tax in respect of 2020.
- Waiver of Liquor License fees for 2021.
- Deferral of the Landfill Levy for six months.
- A 25% discount (waiver) on the Congestion Levy, and a payment deferral for any amounts outstanding.
Outdoor Eating and Entertainment Package
- Hospitality businesses: Grants of up to $5,000 for licensed and unlicensed cafés, restaurants, takeaway food businesses, pubs, taverns, bars and clubs with a payroll of less than $3 million to pay for outdoor entertainment equipment (such as umbrellas, outdoor furniture, screens and other equipment). Be quick! Applications close on 30 November 2020.
- Reactivating Melbourne City: The City of Melbourne and the Victorian Government will establish a Melbourne City Recovery Fund to finance infrastructure works to make the city more COVID-safe, help small businesses in the city adapt their operations to be more COVID-safe, to fund COVID-safe events and cultural activities within the city. $30 million of the Fund has been allocated to provide grants for small and medium businesses to assist with paying for equipment and to convert spaces into hospitality areas. Be quick! Applications close on 30 November 2020.
- Businesses outside Melbourne CBD: Funding to be provided to councils and eligible businesses outside of Melbourne’s CBD to make widespread outdoor dining COVID-safe and practical. Be quick! Applications close on 11 December 2020.
Business Survival Package
- Sole traders: Grants of up to $3,000 will be available to eligible sole traders who operate from a commercial premises or location to which the sole operator is the tenant or licensee. Applications remain open until 30 December 2020.
Victorian Government’s website:
Should you require assistance, or would like to discuss any of the above measures in more detail, please don’t hesitate to contact your William Buck advisor.