The focus on immediate support in pressure point areas while maintaining a commitment for much needed reform are the hallmarks of the NSW Budget, according to the state’s peak business organisation, Business NSW.
Treasurer Matt Kean has announced a deficit of $16.6 billion for the current year, reducing to $11.3 billion next financial year, with a return to surplus expected in 2024/25.
“It’s easy to forget some of the dramatic economic circumstances we’ve faced over the past three years, and the Government’s economic management has meant NSW is in a strong financial position, said Business NSW Regional Manager Kellon Beard.
“From the outset, it must be noted that NSW is the envy of every State in Australia and is the number one State in which to be operating a business,” Mr. Beard said.
“The Government is confident the Budget can return to surplus by 24/25 but that will take solid financial management considering the debt levels and the vast spending measures detailed in this Budget.
“Businesses are expected to contribute more than their fair share, with payroll tax receipts expected to reach almost $12.8 billion annually by the end of the forward estimates, overtaking stamp duty as the Government’s largest source of revenue.
“While we have been great supporters of the Government’s payroll tax reform and relief during COVID, our members will be challenged when the payroll tax rate increases from 4.85% to the pre-pandemic level of 5.45% from 1 July, with an estimated additional $2.3 billion to be collected from businesses over the forward estimates. This pressure adds to the rising inflation and energy costs and labour shortages faced by business.
“This Budget contains a series of measures to address key cost of living measures as well as reforms in areas such as housing affordability, childcare accessibility and education performance, all areas which have been neglected for too long.
“Central to address cost of living pressure is the proposed change from Stamp Duty to a Land Tax option for first home buyers.
“Business NSW has long advocated for Stamp Duty reform as a way to address housing availability and affordability, and back in 2016 this organisation launched a detailed report on how to tackle this very change.
“It’s pleasing to see a government prepared to take on this issue and are willing to introduce measures despite their potential to impact the overall bottom line.
“The equity housing initiative is one which, given the expected take up, should enable more people to break into the housing market without sending prices soaring.
“The key announcement around affordable childcare along with more places being made available will provide greater stability for parents, who often have to make anguished decisions between their own careers and the care of their children.
“These initiatives will result in increased workforce participation, which is a key strategy to address skills shortages, by particularly encouraging more women back into work.
“We know that as a result of closed borders and a lack of international students, the skills gap is widening, and an investment of more than $80 million over the next four years to create 70,000 fee free places in training courses, will help to turbo charge the recovery.
“Business owners across the State will be encouraged by the establishment of the Future Economy Fund, which will provide direct funding to drive research and development, assist in the commercialisation of products and accelerate investment in priority sectors.
“Fast tracking planning and approvals for projects that are ready to commence has long been advocated by Business NSW, particularly in regional areas that are in desperate need of housing, schools and local amenities.
“The Government is delivering a $112 billion infrastructure program, highlighted by funding for Stage 2 of Parramatta Light Rail, which will bring confidence to the business community fearful that this transformational project for our city was going to be shelved. This will enable thousands to live closer to their work and make commuting so much easier.
“Regional tourism has been supported with more than $200 million set aside to support this vital part of our economy, along with $390 million to establish a special precinct in the Snowy region, to attract tourists at all times of the year. We know how important the tourism sector is to revitalising local regional economies.
“There’s no doubt this is a Budget very much aimed at bringing down the cost of living and making key investments, such as home ownership more affordable at a time when the Government will go to the electorate in March, asking for another term,” Mr. Beard said.
About Business NSW
Formerly the NSW Business Chamber, Business NSW is the peak policy and advocacy body which has been representing businesses in NSW since 1826.
0427 767 246