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ACA NSW thanks NSW Treasurer Perrottet on his additional payroll tax relief

The Australian Childcare Alliance (ACA) NSW’s President (Lyn Connolly) and CEO (Chiang Lim) had the opportunity to personally thank the NSW Treasurer (the Hon Dominic Perrottet MP) for the additional payroll tax relief which has cumulatively allowed an estimated 89.5% of those previously paying payroll taxes to cease paying that NSW tax.

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Despite facing economic challenges and competing with other services who do not pay payroll taxes, these early childhood education and care services that no longer have to shoulder the payroll tax burden can now have further faith in their future economic viability and their employees’ jobs. They may even consider downward pressure on childcare fees.

As reported on 18 November 2020, the NSW Budget 2020-2021 outlined the following:

  1. NSW Payroll Tax's Thresholds and Cuts – The payroll tax threshold will be increased to $1.2 million from $1 million with the rate of payroll tax lowered from 5.45% to 4.85% for the next two years. ACA NSW estimates that 72% of the remaining NSW-based services still paying NSW Payroll Taxes will cease paying that NSW tax. And those NSW-based services that will continue to pay the NSW Payroll Tax, their tax bill will reduce by at least 11%. This is very much welcomed by ACA NSW given its advocacies to date.
  2. Job Creation with NSW Payroll Tax Exemption – NSW-based services that create more than 30 [new] jobs in NSW will be exempt from paying payroll tax on any additional jobs beyond this threshold for four years.
  3. Relief for NSW Government Fees & Charges – NSW-based services who do not pay NSW payroll taxes will receive a $1,500 digital voucher each to use against the cost of NSW Government fees and charges. ACA NSW believes this will be rolled out via the Service NSW app, It is anticipated that the NSW Government will make a further announcement on its rollout soon.
  4. Rebate for Safety Equipment – The NSW Government, via its small business rebate program, will provide up to $500 to support small business owners and sole traders who buy and install safety equipment.
  5. Extension of the COVID-19 commercial leases regulation – Such commercial lease regulation will be extended to 28 March 2021 for retail tenants with an annual turnover of less than $5 million. Landlords who reduce the rent of eligible retail tenants from 1 January 2021 to 28 March 2021 can apply for land tax relief of up to 25% on relevant properties for the 2021 land tax year. (NOTE: NSW-based early childhood education and care services who own their land are exempt from NSW land tax. However, this may not apply in a lease arrangement.)
  6. Grants for Skills Training – Women will be supported by $5,000 grants for training and support to return to the workforce while $17 million will be spent for upskilling, mentoring and job matching for people working in the care economy.
  7. Pathways into Teaching – The NSW Government will develop a new model to support the entry of mid-career professionals into teaching. Building on recent recommendations made in the NSW Productivity Commissioner's Green paper, the NSW Budget announced skills reforms to introduce new pathways into trades, particularly for mature workers and women.
  8. Property Tax Reform – The NSW Treasurer has announced a proposal for property tax reform with a plan to replace stamp duty with an annual tax on land value. At this stage, it is unclear whether this will apply to commercial property. Nevertheless, the NSW Government is seeking stakeholder feedback on the proposal.
  9. Funding extension of free (community) preschool to 2021 - ACA NSW members would be aware of this NSW Government's $120 million announcement on 8 November 2020 prior to the release of the NSW Budget. While ACA NSW congratulates about 700 community and mobile preschools (who do not receive the Commonwealth's Child Care Subsidy) for receiving such support during the COVID-19 pandemic, ACA NSW is concerned that the NSW Government has again ignored up to 3,202 other NSW-based preschools and up to 150,000 similarly aged children. ACA NSW will have more to update its members on this issue as it engages with the NSW Government.

Members can contact the ACA NSW office on 1300 556 330 or nsw@childcarealliance.org.au for further information/clarification.

PUBLISHED: 24 NOVEMBER 2020