In his weekly business banking post our CFO Greg Taylor looks at what the NSW Budget had in store for business.
On June 18 NSW Treasurer Mike Baird handed down the State’s budget for 2013/14. In these austere times there were not many financial sweeteners for business.
The major business finance announcement was an increase to the payroll tax threshold from $689,000 to $750,000 effective next month (July 1).
Payroll tax is imposed on an employer's liable wages in NSW if the total exceeds the payroll tax threshold. The rate is currently 5.45%.
The current $4,000 payroll tax rebate for new jobs will be increased to $5,000 and extended until June 30, 2015. To encourage employers to retain new staff, the rebate will be paid as $2,000 on the first anniversary and $3,000 on the second anniversary. You now don’t have to repay the first year’s rebate if the new staff member is no longer employed on the second anniversary. The Government is also making the rebate applicable for all new jobs. Previously there was a cap of 100,000.
Remember you need to lodge and pay your 2013 payroll tax annual reconciliation by July 21.
Now the bad news.
The automatic increase to the payroll tax threshold in line with inflation has been scrapped. The abolition of state taxes such as stamp duty on business mortgages, non-quoted marketable securities, and transfer duty on business transfers for goodwill, patents and intellectual property has been deferred. The deferral is partly to pay for NSW’s contribution to the Gonski education reforms. The Government had agreed to abolish various duties and taxes as part of an agreement on reform of Commonwealth and State financial relations, but it now says it will review the tax abolition when the low value GST import threshold is lowered. The NSW Business Chamber says NSW is the second highest taxing jurisdiction behind South Australia. NSW business pays almost $400 per head more than Queensland and $100 per head more than Victoria according to the Commonwealth Grants Commission.
Speaking of budgets, you should have reviewed yours in time for the new financial year.
Got a comment on the NSW Budget? Please share your thoughts below.