Payroll Tax Relieft to Benefit Small Hospitality Businesses

May 5, 2016

By Restaurant & Catering Association

Increasing the payroll tax threshold to $650,000 and exempting displaced apprentice wages from payroll tax will reduce business costs, encourage employment and support growth in the Victorian visitor economy, according to peak industry association, Restaurant & Catering Australia (R&CA).

From 1 July 2016, the tax-free payroll threshold will increase to $575,000 and incrementally increase until it reaches $650,000 in 2019-20.

R&CA CEO John Hart says the tax cut announced in today’s 2016-17 Victorian Budget will provide much needed relief to small business operators in the tourism and hospitality sector.

“The restaurant and catering sector is the largest employer in the tourism industry, employing 138,300 Victorians in 18,600 businesses. Ninety four per cent of these businesses are small businesses. The sector has one of the highest rates of expected employment growth nationally at 14.9 per cent or 84,300 jobs by 2020.

“As a labour-intensive industry small hospitality businesses feel the pinch of payroll tax more than any other sector. Today’s announcement shows a willingness to tackle business costs and make it easier to employ more people,” Mr Hart says. Mr Hart says exempting wages of displaced apprentices from payroll tax is also a good employment initiative.

“Apprentices represent the next generation of hospitality professionals. Incentivising operators to re-engage these employees in the workforce will support the growth of our sector long-term,” Mr Hart says.

Today’s budget also provides $67 million in funding for tourism marketing and regional and business events. Visit Victoria, the state’s combined tourism marketing and major events organisation, will receive $38 million over two years to attract visitors from interstate and abroad.

“Ensuring Visit Victoria is adequately funded is essential to boost industry confidence, drive visitation and create jobs in regional and metropolitan Victoria,” Mr Hart says.

“For every dollar spent in the tourism and hospitality industry, a further 90 cents is generated elsewhere in the economy. It makes good economic sense to support this sector through tourism and events funding.

“Tourism and hospitality must be recognised as one of the state’s growth sectors, along with international education, medical technologies and professional services.
“The revamp of the state’s tourism marketing and major events agencies in Visit Victoria provides an opportunity to build synergies and capitalise on the state’s reputation as Australia’s major events capital,” Mr Hart says.
Mr Hart acknowledges that whilst the budget proved favourable for the sector, red tape reduction and reducing business costs must remain on the agenda.
“With the budget in a good place the government cannot shy away from tough reform decisions. Today’s payroll tax is a good first step in addressing inhibitors to business growth. However, the gazettal of the Easter Sunday and Grand Final Friday public holidays forces businesses to close and increases business costs.

“We need to rethink public holidays in the state and the impact this has on small business,” Mr Hart says.

 

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