The NSW Government has announced an optimistic, stimulus driven 2021-22 budget aimed at accelerating recovery in the NSW economy since the COVID-19 pandemic began.
For businesses and property owners, there are no major tax changes reported but rather a focus on fiscal stimulus spending and incentives to encourage the purchase of electric vehicles.
No increases to NSW state taxes, such as stamp duty, land tax or payroll tax, were announced, though high property prices and stamp duty continue to add to revenue coffers. Stamp duty now represents the State’s largest revenue source with $9.4 billion expected to be collected for FY2021.
With a better than expected economic recovery post COVID, the NSW Government is also expecting to return to a $0.5 billion surplus by 2024-25 and unemployment is expected to decline to pre-COVID levels of around 4.5% by the same year. This is assuming future COVID outbreaks and restrictions can be contained.
In terms of the proposed property tax changes announced last November (replacing stamp duty with an annual levy), no further announcements have been made since, though the Government has indicated tax reform is still on the agenda to remove inefficient taxes in the state.
Other areas of note are:
1. Sydney CBD support
The NSW Government is proposing to provide further stimulus support for sectors most impacted by COVID-19 restrictions including ongoing closure of international borders.
New targeted stimulus measures include:
- New ‘CBD Fridays Dine and Discover’ $100 vouchers for dining and entertainment to attract city workers and visitors back to the Sydney CBD
- $100 accommodation vouchers to encourage NSW residents to stay in Sydney CBD over the winter months
- $20 million allocated towards a range of music, dining and cultural event initiatives across the CBD.
2. Drive towards electric cars
The NSW Government has indicated it is aiming to increase, by more than 50 per cent, the number of electric vehicles sold by 2030. To encourage the purchase of electric vehicles, stamp duty will be waived for electric vehicles costing under $78,000 from 1 September this year.
In addition, to also encourage the purchase of battery and hydrogen fuel cell cars under $68,000, a $3,000 rebate will be offered for the first 25,000 people that buy such vehicles.
To support the anticipated increase in use of electric vehicles the NSW Government has also committed budget spending on building increased charging infrastructure.
3. Infrastructure spend – Western Sydney
A budget allocation of $1.15 billion has been allocated to the establishment of Bradfield being the new CBD area located in Western Sydney. In addition, high tech facilities to house research institutions and road infrastructure in the area are also planned.
4. Other budget announcements
The Budget also includes:
- additional budget spending on COVID response covering areas such as vaccine distribution, pop up clinics and quarantine management for returning travellers
- vouchers to assist pre-school children between the ages of 3 to 6 to learn to swim at registered swim schools
- support funding for farmers to tackle mice plagues
- support for families in domestic violence, and
- family support for public servants, among other measures.
If, at any time, you have any questions as to how this budget impacts you and your business, please contact your local Bentleys advisor.
NSW budget papers can be found at: https://www.budget.nsw.gov.au/ (external website).
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.