Helping small and family businesses to get ahead is a very important part of our Long-Term Economic Plan.
Another important element is cutting taxes.
Accordingly, a Liberals and Nationals Government will improve Victoria’s payroll tax system to give an additional 28,000 small and family businesses a significant tax reduction.
Victoria’s 640,000 small businesses are the backbone of our economy.
It’s not easy running a small business. They were hit the hardest by Daniel Andrews’ world-record lockdowns, and they are now being hit with rising inflation, labour and skills shortages, and spiralling energy costs.
Under our changes, around an additional 13,300 small businesses will pay no payroll tax whatsoever, while another 14,700 small businesses with a payroll of between $1.6 million and $2 million will receive a meaningful reduction in their annual payroll tax bill of up to $43,650.
We will achieve this by increasing the threshold at which a business becomes liable to pay payroll tax from $700,000 to $1.6 million, and phase in the payroll tax rate for businesses with a payroll between $1.6 million and $2 million.
Bigger businesses with a payroll of over $2 million per year will not be affected by our changes.
Currently, Victoria is the only jurisdiction with a payroll tax threshold below $1 million.
These changes will cost a total of $435 million over the next four years, which has been independently costed by the Parliamentary Budget Office.
Importantly, we can only afford to do this because we are capping Daniel Andrews’ spiralling debt, cutting Labor waste and redirecting the $35 billion from the Cheltenham to Box Hill rail line to fixing the health crisis.
Leader of the Liberal Party, Matt Guy, said rewarding hardworking Victorian small and family businesses is a part of the Liberals and Nationals’ Long-Term Economic Plan.
“Small and family businesses are the backbone of our economy and deserve to be supported to get back on their feet.”
“Our changes will make Victoria the most competitive state for payroll tax for small business, meaning more jobs and a stronger economy for all.”
Shadow Treasurer, David Davis, said under the Liberals and Nationals, Victoria would go from having the worst payroll tax system in the nation to the best.
“The Liberals and Nationals have real solutions to reduce taxes and ease financial pressures on all Victorians.”
“A higher payroll threshold means more money for small and family businesses to invest and grow – benefitting the whole community.”
Shadow Minister for Jobs and Small Business, David Southwick, said the Liberals and Nationals’ plan to slash payroll tax would mean more jobs for Victorians across the state.
“Payroll tax is a tax on jobs and by slashing these rates we will support small businesses to grow and hire more staff.”
“Only the Liberals and Nationals have real solutions to back small and family businesses to recover and grow for the future.”