NSW State Budget 2020-21
The New South Wales (NSW) Government delivered the 2020-21 State Budget on 17 November 2020. The Budget forecasts a deficit of $16.0 billion in 2020-21 and a return to surplus by 2024-25, with net debt to return to around 7 percent of Gross State Product over the medium term.
Tax-related announcements include:
- Reduction in payroll tax from 5.45% to 4.85% from 1 July 2020 to 30 June 2022, which is less than or equal to the lowest headline rate across all Australian jurisdictions (except for Queensland which has a rate of 4.75% for employers or groups who pay $6.5 million or less in wages).
- A permanent increase in the payroll tax-free threshold to $1.2 million (up from the already introduced increased threshold of $1 million) from 1 July 2020.
- A $500m “Out and About” program to stimulate spending in the local economy – including restaurants, visitor sites, and cultural attractions. Every adult resident will be eligible to claim up to $100 in digital vouchers for spending on entertainment and eating out.
- For those small and medium businesses who do not pay payroll tax, each business will have access to a $1,500 digital voucher to be used towards the cost of any government fees from April 2021 to 30 June 2022. This will be available through the MyService NSW Portal and will operate as a rebate, where a claim can be made after fees have been paid.
- Reform of stamp duty and land tax – the Government has announced a consultation process to tackle inefficient property taxes and will seek feedback from the public on a possible transition away from the current transfer duty and land tax regimes to a single property tax model, such as an annual property tax, that will reduce the up-front cost of acquiring homes and other properties.