TREASURY LEGISLATION AMENDMENT (COVID-19) BILL 2020
Yesterday the NSW parliament read for the second time the Treasury Legislation Amendment (COVID-19) Bill 2020 to introduce further critical measures for the assistance of small business. This bill has been passed by both houses on 24 March 2020.
The Bill proposes two changes to the Payroll Tax Act 2007 in an attempt to adjust State fiscal policy and provide direct taxation relief.
PROPOSAL 1: Reduction of Payroll tax
NSW Parliament proposes to reduce annual payroll tax liability by 25% this financial year for eligible business. A list of eligible businesses has yet to be released.
The aim is to reduce the tax liability for businesses who wish to retain their staff without penalty in this difficult time.
In addition to this the Chief Commissioner of State Revenue will defer monthly payroll tax payments providing $30,000.00 NSW businesses with an average saving of $15,000.00 per year and increase the tax threshold from $900,000.00 to $1,000,000.00 on 1 July 2020.
PROPOSAL 2: Access to Long Service Leave
Those with accrued long service leave may take the opportunity to take long service leave during these initial and intense stages of the pandemic response.
The NSW Parliament has proposed measures to enable employees to access, and notify their employers of their intention to take long service leave with greater flexibility. Currently an employee must provide their employer with a minimum of 4 weeks’ notice that they intended to take long service leave, this Bill proposes that an employee may give less than 4 weeks’ notice (the precise amount of notice hasn’t been specified yet).
The bill also allows for an employer and employee to agree that part of their long service leave may be used, which provides flexibility where the employee may not want to use their full entitlement.
Whilst an active fiscal policy is welcomed, such measures would be well complemented with an injection of government spending specifically targeted at small business.
A reduction in tax, fees and other payables is good but these measures may prove ineffective in the wake of forced closures and severe reductions in trade. For these measures to work effectively, an income supplement for small businesses would go a long way, that said these measures seem to be a step in the right direction.
A draft copy of the bill as passed by both houses of NSW Parliament can be found at:
Second reading speech can be found at:
As further information comes to light we will continue to keep you informed.
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This publication is © Nexus Law Group and is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.