Infrastructure spending, payroll tax reform and funding to reskill retrenched manufacturing workers and boost female participation in the workforce are among jobs measures in the Victorian budget.
While the Andrews government announced a $221 million cut to payroll tax for regional businesses and threshold changes for small business over four years, it will still reap almost $6 billion in payroll tax.
Victorian budget 2017: Winners and losers
Who are the winners and losers from this year’s Victorian state budget?
The budget estimates that payroll tax revenue will grow by 3 per cent to $5.9 billion in 2017-18, and 5 per cent over the following three years reflecting an increase in full-time and part-time jobs.
In the year to March Victoria’s average employment rate grew by 3.4 per cent.
Victorian Treasurer Tim Pallas said greater infrastructure spending, including, almost $2 billion on roads and $2 billion on public transport, would create an additional 50,000 jobs over four years.
“This budget will stimulate statewide employment growth and drive private sector investment,” he said when he unveiled the budget on Tuesday.
Victorian Chamber of Commerce and Industry acting chief executive Bryce Prosser said the payroll tax cuts and commitments to transport and social issues would boost the confidence of businesses to invest and grow.
Scope for further reform
There are cuts to the payroll tax rate for thousands of regional businesses, but rates remain the same for most other businesses, leaving scope for further reform in future budgets.
Former employees of Ford, Toyota, GM Holden and the Hazelwood power plant will be able to get retraining and career advice. Photo: Darren Gray
For now, the government is changing the threshold at which the tax kicks in. It has committed $48 million to bring forward the timing of the tax-free threshold announced in last year’s budget.
The $575,000 payroll tax threshold will increase to $625,000 from July 1 this year and $650,000 from July 1, 2018.
The budget lock up ahead of the Treasurer Tim Pallas handing down the budget. Photo: Penny Stephens
The government expects 38,000 businesses to benefit from the threshold change and, in two years time 1600 employers will have stopped paying payroll tax.
The budget also includes a payroll tax rate reduction of 25 per cent for regional businesses.
This budget will stimulate statewide employment growth and drive private sector investment.
Victorian Treasurer Tim Pallas
About 4000 regional businesses will see their rate drop from 4.85 per cent to 3.65 per cent.
“It will mean Victoria’s regional employers will have the lowest payroll tax rate in the nation,” Mr Pallas said.
The government expects 38,000 businesses to benefit from the threshold change. Photo: Penny Stephens
And 9700 additional small businesses can opt for an annual payroll tax payment instead of monthly payments.
Reskilling retrenched workers
Former employees of companies including Ford, Toyota, GM Holden and the Hazelwood power plant will be able to get retraining and career advice through the $10.2 million Local Industry Fund for Transition program.
The government will also channel $90 million towards attracting private sector investment and job creation in sectors including manufacturing and aviation and $24.8 million for Visit Victoria to attract visitors to the state.
To help the Latrobe Valley following the closure of Hazelwood, this year’s budget also gives $110 million to establish a timber plantation there.
There’s $42.5 million for a Victorian Gas Supply Program aimed at identifying and assessing new discoveries of onshore conventional gas, offshore gas and underground gas storage. This will be done with scientific, technical and environmental studies on the risks and benefits.
There’s also $23.7 million to help households and businesses manage their energy usage and compare prices.
Apprentice training gets a small boost, including $8.2 million for apprentice support officers to make sure apprentices under 25 get training and jobs.
Push to get women back to work
The state budget also includes a small amount of funding to drive greater female participation in the workforce.
This includes $6.2 million to increase female representation on sporting boards, $1.4 million to promote women’s self-employment and business skills, and $1.1 million to improve financial literacy.
Over the next four years, the government is counting on expenses to grow by 3.2 per cent a year on average compared to revenue growth of 3.7 per cent on average.
In 2017-18 alone the government will collect $63.4 billion in revenue, a large amount of which will come from $21.8 billion in state taxes including land transfer duty ($6.2 billion), land tax revenue ($2.4 billion), payroll tax revenue ($5.9 billion), gambling tax revenue ($1.9 billion), insurance tax revenue ($1.3 billion) and motor vehicle taxes ($2.5 billion).
The budget papers state: “the pace of growth in the near term is expected to ease as revenue from Victoria’s land and property taxes moderates, however, this is expected to be offset by overall strength in payroll tax revenue from a solid labour market and strong population growth”.
The 2017-18 surplus is expected to be $1.2 billion, with surpluses averaging $2.4 billion over the forward estimates.