For small businesses, there’s some measures to be pleased about with the Government set to increase the payroll tax free threshold from $700,000 to $900,000 in the next financial year, up to $1 million in 2025.
This is especially valuable for new small businesses, to have a wider net of tax relief while they’re first getting off the ground.
However, the news is concerning for larger retailers, with the Government looking to alleviate debts accrued during the pandemic.
Businesses with national payrolls over $10 million per year will pay an additional 0.5% payroll tax for the next decade. Businesses over $100 million per year will pay a further 0.5%. (a total of 1.0% increase for $100 million+ businesses).
The ARA issued a strong response to this decision. We’re very concerned about the ramifications of payroll tax hikes on businesses. In effect, payroll tax is a tax on jobs.
And it came only days after revelations WorkCover premiums in Victoria will increase by 42%, putting further pressure on businesses already struggling to manage higher costs. You can read more of our response here.
With cost-of-living pressures impacting spending, there were double-digit spending declines across categories including Jewellery (down 21.1%), Home Furnishings (down 17.5%), Electronics (down 15.9%) and Lodging (down 14.8%).
It’s the slowdown many anticipated, and it makes each month’s RBA decision that much more important.
I also want to thank everybody who attended the ARA’s CEO Lunch last week – which was heavily tied to an historic year for Indigenous reconciliation.