The Victorian Government’s budget has delivered small payroll tax and workers compensation premium cuts for small business, but industry groups say the Government needs to do more to help the state’s business community.
Payroll tax will fall by just 0.05% to 4.9% from July 1, although Treasury says just 31,000 businesses will benefit from the cut, which will cost the budget $193 million over the next four years.
While the Victorian Employers Chamber of Commerce and Industry welcomed the small cut, which it says will save Victorian businesses around $50 million a year over the next four years, Pitcher Partners partner Craig Whatman has pointed out that the state’s payroll tax threshold has remained static at $550,000 since 2002.
“The threshold should have been raised in conjunction with lowering the rate to help small businesses in Victoria.”
VECCI also estimates the reduction in workers compensation premiums, which will be cut by 3.5% over the next four years, will result in $60 million in annual savings over the next four years. Only Queensland has a lower level of workers compensation premiums.
But VECCI isn’t entirely pleased with the cuts and chief executive Wayne Kayler-Thomson says the states must push for further tax reform to reduce costs for business.
“The only way to progress this is a full review of Government expenditure to address the number of back-office public servants, who have grown in number by a whopping 37% since 2000, the highest of all the states.”
Other measures in the budget that will help small business include:
The Government has forecast a budget surplus for 2010-11 of $872 million.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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