Will Victoria election herald a payroll tax rebate?
It’s doubtful that payroll tax will be at the forefront of Victorian voters’ minds when they go to polls on Saturday. But it might be an important outcome of the vote, depending on the result.
Labor, if successful, has promised to extend a payroll tax rebate scheme which already exists in NSW and Tasmania. This scheme is important, lucrative, and yet strangely little-known. It is non-political, given the Coalition government in NSW has recently tried to think about ways of getting more take-up for its scheme.
It all started back in 2011 when, as part of its Jobs Action Plan, the NSW government introduced the scheme whereby $4,000 per new job created in the state could be reclaimed by employers, assuming certain conditions were met. Earlier this year, Mike Baird (then Treasurer, now Premier) issued a press release highlighting that while the NSW government had exceeded its pre-election commitment of creating 100,000 new jobs in NSW, less than half of these (46,000) were as a result of the Jobs Action Plan. So it can be inferred from this that potentially up to 53,000 new jobs have been created by employers who have not availed themselves of the rebate available to them. At $4000 a job, this is potentially more than $200 million going begging.
The NSW government has recently announced that the Jobs Action Plan would be extended to 30 June 2015, increased to $5,000 per new job, and the 100,000 jobs cap removed. Additionally the requirement for employers to repay the first year’s rebate if the new employee was no longer employed at the second anniversary date has been removed. This has made the Jobs Action Plan even more attractive to employers in NSW and illustrates its perceived efficacy as a macroeconomic tool by the NSW government.
So what was the problem?
Partly, no-one seems to have known about it. It was poorly publicised. Anecdotal evidence suggests the majority of companies we have approached were unaware of the Jobs Action Plan. Second, it was very clunky and onerous, requiring registering each new employee within 30 days. This administrative burden has now been considerably reduced.
It’s not often that good money is offered by government and we would strongly urge all NSW and Tasmania companies to look hard at this scheme. And without wishing to get into politics, Victoria’s businesses should keep a careful eye out for the result on Saturday there too.