2020/21 NSW State Budget Released
20 November 2020
On Tuesday 17 November 2020, the NSW Government released the 2020/21 NSW State Budget. As with the Federal Budget, the NSW State Budget was heavily focused on providing a response to the economic impact of COVID-19. Unlike the Federal Budget, there was a greater focus on direct spending on infrastructure projects and exploring duties and tax reform, and less focus on stimulus measures.
Payroll tax cuts
The payroll tax threshold for NSW will be increased to $1.2 million from 1 July 2020. This is a permanent increase to the threshold.
There will also be a temporary two-year reduction in the payroll tax rate from 5.45% to 4.85%. This will apply from 1 July 2020 to 30 June 2022.
Property tax reform
As part of this Budget the NSW Government has announced that over the coming months it will begin the process of seeking public feedback on proposed property tax reforms. Under these reforms, homeowners will be given the choice to pay stamp duty up front when acquiring residential property or a smaller annual land tax. Further, existing stamp duty concessions for first home buyers will possibly be replaced by a grant of up to $25,000.
For more details of the proposed reforms, including information on how to provide feedback, please refer here.
Vouchers for small and medium size businesses
Small and medium size businesses which do not have a payroll tax liability are to receive a $1,500 digital voucher that can be applied against government fees and charges. It is intended that:
- The vouchers will be available to small and medium size businesses in NSW which do not pay payroll tax;
- The vouchers will be capped at $1,500, and can be used towards the costs of any government fees and charges;
- Will be accessible through the MyService NSW portal and will operate as a rebate, where a claim can be made after fees and charges have been paid;
- Will be available for use from 1 April 2021 to 30 June 2022.
“Out and About” vouchers
Every adult in NSW will be eligible to claim up to $100 in digital vouchers to spend on eating out and entertainment.
Jobs Plus Program
The NSW Government seeks to encourage domestic and international businesses into NSW through payroll tax relief and other support as part of the new $250m Jobs Plus Program. The program aims to create or support 25,000 jobs to 30 June 2022 and will support companies who want to relocate their head offices to NSW or expand their jobs footprint in NSW, if they create at least net 30 new jobs.
For further information, please refer to the NSW Budget website, or contact your local Boyce accountant.
Please note that the budget measures must still be legislated, and are announcements only at this stage. We will provide more information as it becomes available.