Victorian small businesses have applauded changes to payroll tax in Premier Daniel Andrews’ first budget, saying it will help them compete against interstate companies and employ more people without increasing their overall tax burden.
The 2016-17 Victorian budget, handed down yesterday, revealed the state government is tweaking payroll tax for the first time since 2002.
The payroll tax threshold will be lifted from $550,000 to $650,000 over a four-year period.
Mark Stone, chief executive of the Victorian Chamber of Commerce and Industry, said in a statement the changes to payroll tax will reduce pressure on approximately 36,000 businesses across the state.
“A further 2800 Victorian small businesses will be kept out of the payroll tax net completely,” Stone said.
“The payroll tax threshold has not changed since 2002, and today’s increase will enable thousands of businesses to consider employing more people.”
Businesses in the tourism sector were also winners in yesterday’s budget, with the announcement of a $101 million regional tourism fund.
Dianne Smith, chief executive of the Victorian Tourism Industry Council, said in a statement the funding boost for regional tourism is good news for businesses outside Melbourne.
“The benefit of drawing more international visitors to regional Victoria is huge,” Smith said.
Brendan Washington, the owner of bike shop Washington Cyclisme in Wodonga, told SmartCompany he hopes some of the tourism money finds its way to smaller towns outside the traditional tourism hotspots like Phillip Island and Sovereign Hill.
“Particularly in north east Victoria, there’s a lot of untapped areas that would be really liked by a lot of people if they were to explore them – particularly by bike or foot,” Washington says.
“You’ve got such great areas like Lake Hume and up towards Tallangatta and even further in the Murray River region. And to the west of Wodonga you’ve got the winery region.
“You’ve got little towns that would have a lot to offer and could really benefit from tourism if there were just a few more facilities or work done to improve trails and make them a little bit more user-friendly. Or even just to encourage people to come and visit – a bit of promotion would be great.”
While Washington runs his business by himself at this stage and therefore does not have to pay payroll tax, he thinks the state government lifting the threshold for payroll tax is a good thing for fellow regional businesses who are growing quickly.
“I’m not anti-tax, but any tax break is always good,” he says.
Broede Carmody is a former senior SmartCompany reporter. Before this, he was a co-editor of RMIT University’s student magazine Catalyst.
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