A small summary of the Victorian Budget 2023-24 released yesterday. Here is a look at who stands to gain and who stands to lose
WINNERS
Payroll Tax Relief for Small Businesses: The tax-free threshold for payroll tax will be raised from $700,000 to $1 million within a two-year period. Small businesses with payrolls up to $3.6 million will benefit, with potential annual savings of $14,550 for a business with a $1 million payroll. These arrangements primarily benefit small- and medium-sized businesses.
Stamp Duty Replacement for Non-Residential Properties: Stamp duty for commercial and industrial properties will be eliminated and replaced with an annual property tax. This change is expected to inject $50 billion into the state economy.
Free Car Registration for Apprentices: Apprentices will receive free car registration, resulting in savings of up to $865 per year.
Continued Funding for Free Kindergarten Programs: Funding will be allocated over the forward estimates to provide free kindergarten programs for three- and four-year-olds in participating services.
Extended Land Tax Exemption for Homeowners: Starting from 1 January 2024, the state revenue commissioner will have the authority to extend the land tax exemption on principal places of residence under construction or renovation for up to two additional years in cases of builder insolvency, providing additional time for completion.
LOSERS
Payroll Tax Increase for Big Businesses: Businesses with national payrolls exceeding $10 million annually will face additional payroll tax, generating $3.9 billion over four years. This measure will remain in effect until 2033.
Land Tax Changes for Property Investors and Holiday Homeowners: Land tax for property investors and holiday home owners will increase, resulting in an average additional cost of $1,300. This adjustment is expected to raise $4.7 billion over the forward estimates. All land tax exemptions will also be affected.
Absentee Property Owners: The surcharge for absentee property owners will rise from 2% to 4%, aligning with the rate in NSW.
Public Service Job Cuts: Up to 4,000 jobs in the Victorian public service will be eliminated by June 2024 as part of significant cuts to back-office, consultants, and labour hire. Pay growth will be limited to 3%. The overall savings from these cuts are estimated to reach $5 billion.
Impact on Commuters: The Melbourne Airport Rail project and Geelong Fast Rail have been temporarily put on hold.
Workcover Premium Increase: Workcover premiums will rise for businesses, and extended benefits for stressed or burnt-out workers will be reduced. The average payment by businesses under the scheme will increase from 1.27% to 1.8% of remuneration starting from 1 July.
Commonwealth Games Funding: The budget does not allocate any new funds for the 2026 Commonwealth Games.
Removal of Payroll Tax Exemption for Private Schools: Victoria’s private schools will no longer be exempt from payroll tax, resulting in over $420 million in revenue for the state over a three-year period.
Early Shutdown of Native Timber Industry: The native timber industry will cease operations on 1 January 2024, six years ahead of the original schedule.
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