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Premier Daniel Andrews and Treasurer Tim Pallas recently released a very big spending budget in an attempt to restart the Victorian economy.

The budget covers health, education, tourism, infrastructure, the environment, housing and public order. The impact of the pandemic on the Victorian economy has been significant, with Victoria’s state final demand falling by 8.5% in the June quarter. The budget is designed to create 400,000 jobs over the next 5 years.

We have summarised below the components of the budget that we thought the business owners of Prime clients will be interested in knowing more about.

The full budget summary is availablehere.

Payroll tax and employee support

• The deferral of payroll tax for businesses with payrolls of up to $10 million for the full 2020-21 financial year.
• An increase in the threshold for paying payroll tax on an annual basis from $40 000 to $100 000.
• A Secure Work Pilot Scheme to provide sick leave for casual staff – this two‑year pilot will provide up to five days of sick and carers pay at the national minimum wage for casual or insecure workers in priority industries.

The Jobs Plan includes an allocation of $836 million in payroll tax relief to encourage employees to hire new workers, called the New Jobs Tax Credit. The new jobs tax credit will be available to small and medium enterprises to increase employment by re-hiring staff, restoring staff hours or supporting new jobs. For the next two years, eligible businesses will receive a tax credit of 10 cents for every dollar of Victorian taxable wages above the previous year’s.

This means that not only will eligible businesses pay no payroll tax on these increased wages – they will get a refund of tax already paid. The more they increase wages and employment in Victoria, the less payroll tax they will pay.

New investment funds including:

• Venture Growth Fund ($25.7 million). The Fund will be run by Invest Victoria for injection of late-stage capital into revenue positive startups.
• Angel Sidecar Fund ($10 million). To help female start-up founders access capital. The fund is to be run by LaunchVic. The fund will run over 3 years and provide up to $250,000 co-investment into each early stage start up. The fund will invest along side private investment.
• Industry Recovery and Growth Fund ($40 million). Funding focused on facilitating private sector investment in advanced manufacturing. This includes targeted investments in high growth sectors like food manufacturing and pharmaceuticals.
• Victorian Startup Capital Fund, ($61 million). Aims to unlock private capital to support innovative, high-growth startups and entrepreneurs.
• $80 million on a package of targeted investment incentives to attract the best and brightest international companies to Victoria.

Support for exporters

This includes funding for pilot virtual trade missions, establishing a Freight Stabilisation Fund and Global Gateway vouchers to assist exporters identify new export markets.

Business Grants

Cash grants to support small and medium sized businesses. This includes:

• $822 million for the third round of the Business Support Fund, building on the first two rounds which provided funding totalling $1.8 billion of support.
• Grants of up to $50 000 for local business groups and chambers of commerce, to assist members to transition to COVID Normal.
• An investment of $44 million to equip businesses to thrive in COVID Normal. This includes $20 million for small businesses to access off-the-shelf digital programs, training and work-shops designed to help businesses adapt to online operations.
• The $100 million Sole Trader Support Fund to help sole traders in affected sectors.

Research and technology

The Breakthrough Fund will be allocated $2 billion to help support research and development adoption and commercialisation, supporting 15 700 jobs over 10 years. This investment will focus on priority industries, including medical research, health and life sciences, agri food, advanced manufacturing, clean energy and digital technologies. A long term investment strategy will be developed by a partnership between industry, research, philanthropic and finance sectors. It will support projects delivered with knowledge institutes and industry stakeholders, anchored at key innovation and employment precincts, including Parkville, Arden Macauley, Fishermans Bend, Latrobe Bundoora and Monash Clayton.

A further $50 million for research and development loans. The initiative will provide loan support to SME’s that are eligible for the R&D tax incentive program to borrow their entitlements at low rates of interest. Further details of the initiative arehere.

Clean energy initiatives

Supporting new renewable energy zones through grid investment, delivery of the Victorian Big Battery, upgrades to transmission networks and new clean energy generation projects to be facilitated. Total funding of $682 million will also attract and fast-track investment in innovative energy projects that will deliver transformational benefits to Victoria, with consumers able to benefit from these projects from 2025.

Areas of interest to business owners

• Providing stamp duty waivers of up to 50 per cent for residential property transactions and up to $1 million and land tax discounts for build to rent projects until 30 June 2021.
• $500 million for mobile blackspots and business broadband connectivity.

If you think that any of the above areas are applicable to your business and would like to discuss further about how we can help you, please email us as per contact information below:

The information in this article contains general advice and is provided by Primestock Securities Ltd AFSL 239180. That advice has been prepared without taking your personal objectives, financial situation or needs into account. Before acting on this general advice, you should consider the appropriateness of it having regard to your personal objectives, financial situation and needs. You should obtain and read the Product Disclosure Statement (PDS) before making any decision to acquire any financial product referred to in this article. Please refer to the FSG (www.primefinancial.com.au/fsg) for contact information and information about remuneration and associations with product issuers. This information should not be relied upon as a substitute for professional advice, and we encourage you to seek specific advice from your professional adviser before making a decision on the matters discussed in this article. Information in this article is current at the date of this article, and we have no obligation to update or revise it as a result of any change in events, circumstances or conditions upon which it is based.