Payroll tax cuts and deferrals for thousands of SA businesses extended for another three months in $85m jobs stimulus
Hundreds of medium-sized SA businesses struggling with the COVID recession have won a new reprieve under an $85 million jobs stimulus.
Coronavirus
Don't miss out on the headlines from Coronavirus. Followed categories will be added to My News.
Payroll tax cuts for hundreds of medium-sized SA businesses battling the COVID recession will be extended for a further three months, Treasurer Rob Lucas says.
The State Government on Monday announced another $85 million stimulus, which it said was aimed at supporting jobs and would deliver medium-sized businesses up to $42,000 in savings.
The total stimulus effort is a combination of waived and deferred payroll tax payments.
It comes as JobKeeper subsidies are reduced or cut off entirely from Monday.
Businesses with annual payroll of up to $4 million will be granted an extra three-month tax waiver, worth about $25 million, on top of the six months already given during the pandemic.
That is expected to help up to 2400 medium-sized businesses across the state.
About 1900 businesses with annual wage bills of more than $4 million will also be able to continue to defer their payroll tax liability, if they can prove a COVID hit, for three months.
Mr Lucas said this would deliver around $60 million in cash-flow benefit, on top of the $120 million in payroll tax deferrals already received over the past six months by big business.
Businesses with wage bills below $1.5 million already aren’t charged any payroll tax, under a key election promise made by Premier Steven Marshall in the 2018 campaign.
Those businesses have already received a $10,000 grant to aid cashflow through lockdown.
Mr Lucas said: “By slashing payroll tax until the end of the year, we are giving these businesses every chance to get back on their feet and keep their hardworking staff in jobs”.
“This will continue to ease the cash-flow burden on businesses at a time when they need it most, money that can be spent in other areas of need,” Mr Lucas said.
“This is all about keeping as many South Australians in jobs as possible, and helping local businesses keep their lights on and their doors open as we work together to get through the greatest economic challenge of our time.”
The government said it was investing $2 billion in economic stimulus, including $187 million in emergency cash grants for small businesses and not-for-profit organisations, land tax relief, the waiving of various fees and charges and infrastructure investment.
Opposition treasury spokesman Stephen Mullighan has raised concerns that reductions in federal support including JobKeeper would harm SA more than other states.
“(It) will have a real impact on employment in SA, with 54,000 South Australian businesses having to make tough calls on keeping on the over 220,000 South Australian workers under the scheme,” Mr Mullighan said.
“Wages in South Australia have been stabilised by JobKeeper whilst JobSeeker has also stimulated disposable income, there is great concern that businesses and jobs will suffer from people having less money in their pockets to spend.
“South Australia is more exposed to JobKeeper reductions than some other states because we’ve got the smallest state government COVID stimulus of any state.”
Latest jobs figures show SA has the highest unemployment rate in the nation.
A rapid return of jobs lost during lockdown has been cancelled about by even larger numbers of people who have started looking for work again.
In August, SA added a massive 13,500 jobs. However, 14,100 more people also starting looking for work at the same time.
There are now 841,200 people employed in SA. That is up from 819,100 in April, and 827,700 in July.
In March, there were a near-record 856,300 people with jobs.
SA’s unemployment rate is 7.9 per cent, compared with a national average of 6.8 per cent.