South Australia delivers a Budget like no other

Taking advantage of low interest rates, the State will borrow more to support the economy through new grants to provide relief to businesses still affected by COVID, as well as significant investments in roads and sport. Net government debt will rise to $33.2b over the forward estimates, with a deficit of $2.6b this year.

Cash grants

Part of the $4b stimulus package announced earlier this year, eligible businesses and not for profits impacted by COVID-19 will be able to access a second $10,000 grant, with eligible businesses that do not employ people – including sole traders – can access a new $3000 cash grant.

Applications for grants are now open and close midnight 14 December 2020.

It is estimated that 10,000 small businesses and not for profits will benefit from these additional cash grants. This is on top of the $186m in cash grants paid to over 187,000 recipients in the first round of the stimulus.

Payroll Tax

The Budget highlighted several – both new and existing – payroll tax relief measures to support businesses during the COVID-19 pandemic, as outlined below:

• A 15 month payroll tax waiver for businesses and business groups with annual Australian grouped wages below $4 million – in respect of the months of April 2020 to June 2021 (for the return periods of March 2020 to May 2021). This represents an additional 6 months to the existing 9 month waiver (announced on 28 September 2020).
• A 6 month payroll tax waiver has been introduced for businesses with grouped annual wages greater than $4 million who are eligible for the extended JobKeeper payment from 4 January 2021 – in respect of the months of January 2021 to June 2021 (for the return periods of December 2020 to May 2021)..
• Up to a 9 month payroll tax deferral for businesses with a payroll greater than $4 million who are adversely affected by COVID-19 – in respect of the months of April 2020 to December 2020 (for the return periods of March 2020 to November 2020), with payment deferred to 14 January 2021, comprising a 3 month extension (announced on 28 September 2020). Extended payment arrangements for such deferred payroll tax liabilities are also available.
• A payroll tax exemption on all JobKeeper payments is continued, as announced on 5 April 2020.
• A 12 month payroll tax exemption has also been introduced in respect of wages paid to new apprentices and trainees who commence a relevant contract of training with an employer from 10 November 2020 to 30 June 2021. This COVID-19 relief measure is intended to support the retraining and reskilling of workers who have become unemployed, as well as the employment of younger people whose job prospects have been adversely affected.

Land Tax

The Budget also outlined a range of previously announced land tax relief measures, as follows:

• An increase to the land tax transition fund from 50% to 100% off the relevant increase in an eligible taxpayer’s land tax assessment in 2020-21, as announced on 26 March 2020. The transition fund provides relief to taxpayers negatively impacted by changes to the aggregation of land which came into effect from midnight on 30 June 2020.
• Up to a 50% reduction on the 2019-20 land tax liability on affected properties, for eligible residential and non-residential landlords where they have provided relief to affected tenants or lost income due to a vacancy. The reduction consists of a 25% reduction based on eligible rent relief provided or rent forgone from 30 March 2020 to 30 October 2020, and a further 25% reduction from 31 October 2020 to 30 April 2021 (announced on 8 September 2020).
• A 25% reduction on the 2019-20 land tax liability for commercial owner-occupiers if they own the land where they operate their business, are eligible for the JobKeeper payment from 31 October 2020, and have annual turnover of up to $50 million (announced on 8 September 2020).
• Up to a 6 month land tax deferral for business and individuals paying land tax quarterly in 2019-20 – in respect of third and fourth quarter instalments, as announced on 26 March 2020.