Victorian Premier Daniel Andrews has pledged to help businesses and startups by creating a $508 million Jobs and Investment Fund, along with stamp duty exemptions and support for companies that hire unemployed young people, in the 2015 state budget.
The additional funding for businesses comes after the state government was heavily criticised by the business community over the introduction of new Grand Final Eve and Easter Sunday public holidays.
The centrepiece of the budget for businesses is the creation of a $508 million fund, called the Premier’s Jobs and Investment Fund, which will be “reserved for strategic, job-creating investments”.
The new fund will be overseen by a Jobs and Investment Panel made up of currently unnamed economic and business leaders, which will advise the Premier on how to spend money in the fund.
Out of the fund, $60 million will be set aside for what the state government describes as a startup initiative, although it is unclear whether this fund will be targeted solely at tech startups, or new small businesses more broadly.
The startup initiative will be tasked with helping businesses in the program to deal with governments and manage their finances, as well providing them with intellectual property and patent advice.
Along with the other initiatives, the state government is also promising to create a $200 million Future Industries Fund, which will give grants of up to $1 million across six key emerging industries:
The Andrews government has also pledged $10.4 million to the Victorian Small Business Commission, $11.4 million for stamp duty exemptions for small businesses purchasing portable equipment and $2 million to help eliminate exploitation among homeworkers.
There is also additional funding in the budget for parts of the state affected by automotive manufacturing closures, with $10.5 million directed to the outer-northern suburbs of Melbourne and $7.5 million for Geelong.
Another new initiative, called the Back to Work Scheme, offers assistance to companies who hire unemployed young people, the long-term unemployed or retrenched workers. Meanwhile, eligible apprentices using a light vehicle in Melbourne will have their motor vehicle registration halved, with bricklayers, carpenters, joiners, electricians and plumbers all eligible for the discount.
In a statement, VECCI chief executive Mark Stone praised the budget.
“The Andrews government’s first state budget delivers on its election promises with an economically responsible budget that makes a significant investment in productivity enhancing, job creating infrastructure,” Stone said.
“Regional Victoria will benefit from the Regional Jobs and Infrastructure Fund that will help businesses grow their workforces, expand markets and invest in local projects. Among key projects that will receive funding are the Ballarat Station Redevelopment, Simonds Stadium (Geelong), the Geelong Performing Arts Centre, Eureka Stadium (Ballarat), and Grampians Peak Trail.”
“Victoria’s education and training system will benefit from new tech schools, more money for Local Learning and Employment Networks (LLEN), as well as a new TAFE Back to Work fund that will support training and employment in partnership with local businesses.”
However, COSBOA chief executive Peter Strong says more details will need to be announced about some of the initiatives before the full impact on small businesses can be properly assessed.
“If the [Jobs and Investment Panel] consists of unions and big businesses supporting their pet projects, it will be a wasted opportunity,” Strong says.
“It needs to be part of a plan to get economic development in the regions and in certain suburbs of Melbourne. Ad hoc ideas have ad hoc outcomes.”
“Let’s see what happens and make sure it isn’t all spent on the big end of town.”
Meanwhile, Pitcher Partners partner Craig Whatman says it’s a safe, first-term budget that delivers on the promises made in the lead-up to last year’s state election, but the Victorian Government should commit to a review of the state’s tax regime to find ways to significantly reduce or eliminate some of the more inefficient taxes that continue to hamper business.
“While there is some targeted stamp duty relief, such as on the transfer of ownership of vehicles classified as mobile plant, which will reduce acquisition costs and help those businesses in sectors like the construction industry, this relief could have been extended generally to all business vehicles,” Whatman says.
“The 3% stamp duty surcharge to be imposed on foreign residential property buyers from 1 July is onerous and will in some cases more than double the stamp duty payable on the purchase of residential property in Victoria, including apartments purchased off-the-plan which makes up the vast majority of this market.
“The government has allocated $50 million in the form of a payroll tax rebate for employers that hire long-term unemployed or retrenched workers. But that’s the extent of the payroll tax relief in this budget period. While any payroll tax relief is welcome, this is a very targeted measure to encourage employers to hire those workers. It doesn’t give general payroll tax relief across the board for business and payroll tax remains their biggest state taxes expense.”
Andrew Sadauskas is a former journalist at SmartCompany and a former editor of TechCompany.
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