NSW Budget Snapshot 2020-21

By Cutcher & Neale Accounting and Financial Services - November 18, 2020

The NSW Treasurer, Dominic Perrottet, announced the NSW state budget in a speech to Parliament on 17 November 2020. Here we take a look at some of the major announcements, including the historic $16 billion budget deficit.

The state’s debt will peak at $104 billion in 2023/2024 and the budget will not return to surplus until the following financial year.

Payroll Tax Cuts

In May 2020, the NSW Government brought forward by one year the increase in payroll tax threshold to $1 million.

The Budget announced a further permanent increase in the payroll tax-free threshold from $1 million to $1.2 million from 1 July 2020.

The NSW Government will also cut the payroll tax rate from 5.45 per cent to 4.85 per cent from 1 July 2020 for two years.

These tax cuts will provide a saving to businesses of around $2.4 billion for this fiscal year and the next – money that can be spent on employing more people and growing the NSW economy.

Helping businesses with fees and charges

The Budget also commits $472 million to provide small and medium size businesses, which do not pay payroll tax, with a $1,500 digital voucher for the cost of government fees and charges.

Service NSW will assist with issuing eligible businesses with the vouchers which will be available from April 2021 through to 30 June 2022.

Further information to become available on the Service NSW website in coming weeks.

 Jobs Plus

The NSW Government will encourage domestic and international business into NSW through payroll tax relief and other support as part of a new $250 million Jobs Plus Program.  The Jobs Plus 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. It includes payroll tax relief, up to a four-year period, for every new job created where a business has created at least 30 new net jobs.

Out and About Program

The NSW Government will inject up to $500 million in the Out and About program to stimulate spending in the local economy, including restaurants, visitor sites and cultural attractions. Every adult resident will be eligible to claim up to $100 in digital vouchers to spend on eating out and entertainment.

This stimulus measure will get money flowing into industries hit hard by the pandemic. It will generate jobs and give the people of NSW a great reason to support their local businesses who need a boost.

Tax Reform

To tackle an inefficient property tax system, over the coming months the Government will seek feedback from the public on a possible transition away from the current transfer duty and land tax system. The outcome of this transition would be lower barriers to home ownership, and a boost to long-term growth.

 Infrastructure

The 2020-21 Budget will continue to invest in an infrastructure program that builds a better NSW, with a record infrastructure pipeline of $107.1 billion to ensure the delivery of projects across the State, including vital infrastructure in Health, Education and Transport.

The record $107.1 billion pipeline is estimated to generate 145,000 jobs directly or indirectly each year. This transformational pipeline of infrastructure projects, both planned and already underway, will boost consumer confidence, putting NSW in a strong position to respond to the economic crisis.

Health

The NSW Government will invest $29.3 billion in recurrent and capital funding in the NSW health system, continuing the COVID-safe measures that have made NSW the standout success of Australia’s pandemic response. As nations around the world have gone back into lockdown, the NSW Government’s support measures will keep NSW ahead of the virus. These include:

  • $500 million to support COVID-19 clinics, hotel quarantine, and increased pathology testing and contact tracing.
  • $385 million for additional PPE to keep frontline workers safe.
  • $30 million for additional emergency department attendances and ambulance calls.

This Budget will also commit $169.4 million over four years to provide vital mental health support to ensure more people can find the help they need.

 Investing in people and their future

  • $337.0 million to provide free small group tutoring to boost learning for vulnerable school children who have been left behind while remote learning during the pandemic
  • $120 million to extend the existing free preschool program to the end of 2021. This funding will support around 44,000 three to five-year-olds attending community preschool in over 700 community and mobile preschools across the State.
  • $318.6 million for Skilling for Recovery, with $159.3 million from the NSW Government, to help job seekers retrain or upskill, and to support school leavers to enter the workforce
  • $80.0 million for 300 new housing sector pre-apprenticeships and cadetships to provide career pathways for young people and social housing tenants

The team at Cutcher & Neale are here to help, please get in touch if you would like further assistance.

 

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