State Budget 2018: Payroll tax rate cut to nation’s lowest level

BUSINESSES in regional Victoria will see their payroll tax rate cut to the lowest level in the nation in a move tipped to help 4000 local organisations.

BUSINESS in regional Victoria will see their payroll tax rate cut to the lowest level in the nation.

The rate will be cut to 2.425 per cent from July, leaving regional businesses paying half of the Melbourne metropolitan rate.

The reduction is tipped to help 4000 businesses.

And it is restricted to businesses with their base in regional Victoria who pay at least 85 per cent of their payroll to regional employees.

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Victorian Treasurer Tim Pallas. Picture: AAP Image/Joe Castro

It is the third reduction of payroll tax in as many years, as the government seeks to boost business growth outside the metropolitan area.

Despite the cuts to what is paid in the regions, the overall payroll tax take keeps climbing, and will leap by about $1 billion in the next four years.

The total payroll tax take hits $7.239 billion by 2021-22.

Treasurer Tim Pallas said the government payroll cut to the regions was “sharing our economic success with every corner of our state”.

The budget also doubles the stamp duty free threshold for young farmers from $300,000 to $600,000.

In the broader economy, Victorian workers are also being told to expect better jobs conditions, with the overall unemployment rate to be steady this year at 5.75 per cent.

It will then drop next year to 5.5 per cent and is tipped to stay at that rate until at least 2021-22.

But the budget also gives a glimmer of hope to Victorian workers looking to see a rise in pay after years of stagnant wages growth.

The wage price index will jump from 2.5 per cent next year to 3.25 per cent by 2021-22.

This was at a low of 1.8 per cent in the 2016 calendar year.

“Along with many other advanced economies, Victoria has experienced a period of subdued wage growth over the past few years,” the budget says.

“There are signs the slowdown in Victoria’s wage growth has bottomed out and is beginning to reverse,” it says.

“There are early signs that (an) anticipated recovery is underway.”

Figures within the budget showed the strongest growth in jobs in February had been in construction and retail trade.

The budget says employment growth is helping both full time and part time workers.

The predictions of better times ahead for jobs came as Melbourne headquartered ANZ today revealed it had reduced its headcount by 4500 workers in the last year.

But Mr Pallas insisted the news was good on the jobs front.

“Nearly 334,000 (jobs) have been created since we were elected, more than anywhere else in the nation during the same time,” he said.

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