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 July 1, 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 said the tax cut announced in the 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 new jobs by 2020,” he said.
“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.”
John said 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,” he said.
The 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 across 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,” John said.
“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.”