Ms SPENCE - My adjournment matter is for the attention of the Minister for Small Business, Innovation, and Trade, and the action I am seeking is an update from the minister as to what benefits small to medium‑sized businesses in the Yuroke electorate should expect as a result of the Andrews Labor government’s payroll tax changes. The Yuroke district is home to many great local small businesses. Cafes, florists, hairdressers and pharmacies all add much to the Yuroke community. I know local small businesses in the Yuroke electorate would appreciate this update from the minister about payroll tax changes.

Response:

I am pleased to confirm that the Government has fast tracked the increase to the payroll tax threshold to $650,000 by 1 July 2018, bringing the new threshold forward one year earlier. Increases to the payroll tax threshold are designed to support Victorian businesses to grow and employ more people. Approximately 37,800 businesses across Victorian will benefit, including approximately 2,500 small businesses in the Yuroke district who will not have a payroll tax liability under the new threshold.

An increase to the payroll tax threshold will give businesses greater capacity to create new jobs. Businesses that were previously on the fringe of paying payroll tax will be encouraged by the new threshold increase to take on additional staff, creating more jobs for Victorians.

To help regional businesses, the payroll tax rate has been reduced by 25 per cent to 3.65 per cent for businesses with payrolls that comprise at least 85 per cent of their wages associated with regional employees.

The payroll tax changes announced in the 2017-18 Victorian Budget aim to improve the cash flows of small and medium-size businesses. To this end, the Government has increased the threshold under which businesses can opt to make annual payroll tax payments, rather than monthly payments.

The threshold under which businesses can opt to make annual payroll tax payments, will increase from annual payroll tax liabilities of $10,000 to $40,000. This will allow an additional 9,700 small businesses to choose between monthly or annual payroll tax payments, removing the administrative burden of performing monthly payroll calculations and allowing for greater flexibility in cash flow management.

Hon Philip Dalidakis MP
Minister for Small Business, Innovation and Trade