Small businesses to benefit from Liberal Nationals Local Business Action Plan
Jobs will be the centrepiece of an elected O’Brien Liberal Nationals Government with the announcement of the biggest reform to payroll tax in a generation.
Under the Liberal Nationals Local Business Action Plan, around 15,000 Victorian small businesses will be removed from the payroll tax system – a system which is a tax on jobs.
Small businesses pay too much tax – and the bigger they grow, the more Victorians they employ, the more they pay. The Local Business Action Plan means a saving of up to $43,650 each year on payroll tax for small business.
Under the plan, an O’Brien Liberal Nationals Government will increase the threshold at which a business is liable to pay payroll tax to $1.6 million.
The current payroll tax threshold in Victoria ($650,000, scheduled to increase to $700,000 in 2022-23) is the worst of any Australian state or territory. Our reform will make Victoria the most competitive state for small business payroll tax.
The Liberal Nationals payroll tax reform plan ensures:
1. Businesses won’t pay a cent of payroll tax until their wages bill is greater than $1.6 million This takes approximately 15,000 businesses out of the payroll tax system entirely.
2. No business will pay the full rate (4.85%) of payroll tax until their wages bill reaches $2 million Payroll tax would be phased in gradually between $1.6 million and $2 million – ensuring no business is hit with a sudden tax hike as they employ more Victorians.
3. All businesses, regardless of their total wages bill, subtract $800,000 from their assessable payroll when determining tax liability All Victorian businesses will have certainty that under a Liberal Nationals government, they will pay less payroll tax.
Under Labor* Under the Liberal Nationals Saving
Payroll of $800,000 $4,850 $0 $4,850
Payroll of $1.6 million $43,650 $0 $43,650
Payroll of $2.5 million $87,300 $82,450 $4,850
* baseline of $700,000 payroll tax threshold as scheduled under Labor policy from 2022-23
While the Andrews Labor Government has no plan for small business recovery, the Victorian Liberal Nationals will remove tax, reduce fees and rally behind small business.
Comments attributable to the Leader of the Opposition and Shadow Minister for Small Business, Michael O’Brien:
“Payroll tax is a tax on jobs, and the Liberal Nationals will cut this tax to create more Victorian jobs.
“Under Labor, Victoria has the worst small business payroll tax in the country. The Liberal Nationals will turn this around and make this state the best place to start and grow a small business.
“An O’Brien Liberal Nationals government will unashamedly be a government for small business jobs. While Labor focuses on unions and the big end of town, we will continue to bat for small business and the millions of jobs the sector creates.
“Small businesses are proud of their independence. They are the jobs engine room of our economy and employ more Australians than big business.
“Only an O’Brien Liberal Nationals government will slash payroll tax for small business to create more jobs to get Victorians back to work.”
Comments attributable to State Member for Eildon, Cindy McLeish:
“As we emerge from the health crisis caused by COVID-19, our state faces the worst economic crisis in our lifetime.
“Our local small businesses are fundamental to keeping the region strong and supporting our local economy. They hate payroll tax as it’s a tax and handbrake on employing people.
“We will continue to fight for small businesses across the region and will be relentless in creating the most attractive state in our country for small business to start up, grow and employ Victorians.”