Chief Minister scraps payroll tax, slashes power bills to help businesses through crisis

THE NT Government will abolish and defer the payroll tax for six months for businesses in response to the coronavirus pandemic. And power bills will also be slashed

NT Chief Minister Michael Gunner has announced his Government will abolish and defer the payroll tax for six months for businesses in response to the coronavirus pandemic. Picture: Glenn Campbell

THE NT Government will abolish and defer the payroll tax for six months for businesses in response to the coronavirus pandemic

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Chief Minister Michael Gunner announced the government would invest $180 million in a package to support Territorians during the crisis, which includes cutting the payroll tax for small and medium sized businesses for six month, and deferring payments for large businesses for six months.

Chief Minister Michael Gunner is expected to make an economic announcement in response to the coronavirus crisis.

Posted by The NT News on Tuesday, 7 April 2020

He also announced power, water and sewerage bills would be slashed by 50 per cent for businesses for six months.

“Today the cabinet has signed off on a new package worth $180 million to reduce costs for local businesses,” Mr Gunner said.

“Right now a dollar that does not have to be spent on payroll or power prices is a dollar that can be spent on keeping a Territorian in a job.

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“This is an unprecedented crisis and all of us have to help carry the load.”

Mr Gunner explained if a business’ payroll was below $7.5 million, the payroll tax would be waived. If above, it would be deferred.

He said the package would be funded through the NT Government’s revenue.

“What we’ve flagged here is that we recognise businesses are doing it tough,” he said.

“They don’t have the money to give to us. If we take this money off a business right now I think I’d be shutting that business on top of the businesses that have already had to shut to keep people safe.

“I think the businesses right now who are struggling wouldn’t be able to pay the power bill, wouldn’t be able to pay the payroll bill, so this is us genuinely recognising hardship and we’re not going to take that money off you. We’re not going to force you to close.”

He said the NT Government would also assist commercial tenants and landlords, however landlords needed to comply the Code of Conduct agreed by National Cabinet to negotiate in good faith with their tenants.

Commercial tenants must be able to demonstrate hardship due to coronavirus and request rent relief, and landlords must negotiate rent relief in order to be eligible to receive payroll relief and utilities bills relief.

“(Landlords) don’t get any of those benefits, they also don’t get other benefits form other grant programs unless they do the right thing here,” Mr Gunner said.

“Essentially what we’re saying is here’s all the incentives, we think they’re pretty good, I think most landlords generally will go along with this. If you don’t the tap’s turned off to the government programs.”

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GOVERNMENT STATEMENT:

For Territory businesses that demonstrate substantial hardship due to the coronavirus crisis, the Territory Government will:

Abolish payroll tax for six months for smaller and medium-sized businesses, and defer it for six months for large businesses; and

Slash power, water and sewerage bills by 50 per cent for businesses for six months (for regulated utility tariffs).

This support will be effective for six months from 1 April, and businesses can apply from 1 May.

The Government will also help Territory businesses who need relief on the cost of their lease, by offering extra support to commercial landlords so they in turn do the right thing by their tenants.

This support comes with strings attached:

When commercial tenants demonstrate economic hardship and request rent relief, landlords will be expected to negotiate relief in line with the Code of Conduct for commercial tenancies, agreed to by National Cabinet.

If they do this they will also be eligible to receive payroll tax and utilities bills relief.

In addition, we expect them to be able to benefit from rates relief provided by local councils.

The Government will also waive the property activation levy for relevant landlords whose property becomes vacant due to the coronavirus crisis.

However, if commercial landlords do not negotiate in good with faith their tenants, landlords will not be eligible for this relief, or any of the economic support packages recently announced by the Government.

Today’s announcement means the Territory Government is now investing more than $300 million to protect the economy and save jobs during this unprecedented crisis.

The coronavirus crisis is hurting every part of the economy, and that means everyone needs to help carry the load.

The Government has written to Territory local governments requesting they provide relief for six months through a three-month rates waiver, followed by a three-month rates deferral.

We are encouraged by our conversations with councils so far, and expect they will offer this relief at a minimum.

The payroll tax waiver will apply to Territory employers with a total payroll bill below $7.5 million where turnover has been reduced by at least 30 per cent because of the coronavirus crisis.

The payroll tax deferral will apply to Territory employers with a total payroll bill above $7.5 million where turnover has been reduced by at least 50 per cent because of the coronavirus crisis.

Support for households and individuals

The Government is working on legislative amendments to:

Create longer periods of mandatory negotiation between tenants and landlords; and

Fairer terms for new leases when there is demonstrated hardship because of the coronavirus.

We have already taken action to freeze regulated power and water prices and government regulatory fees at current levels until 1 July 2021 for households and businesses.

Jacana Energy and the Power and Water Corporation also have existing financial hardship arrangements in place to provide support and flexibility for households struggling due to the coronavirus crisis.

Today’s support is in addition to the action we’ve already taken to support jobs, businesses and households get through the coronavirus crisis, including:

Home Improvement Scheme

Business Investment Scheme

Immediate Works Grant

Small Business Survival Fund

Worker and Wellbeing Fund

Freezing fees and charges

Support for tourism industry