The Federal Budget has been a welcome boost for South Australian business, particularly the instant asset write-off changes. However, forecast GST increases are less than we had hoped for and some infrastructure funding is still pending shovel ready projects along the North-South corridor.
Skills and employment, business and personal tax breaks appear to be the biggest winners – which will benefit all of South Australia - along with significant infrastructure spending both in metropolitan Adelaide and the regions.
While the State Government will take a hit when its share of the GST pie is cut by $187 million in 2019-20, putting pressure on to drive efficiencies and make savings across all sectors, it is important to remember that GST still rose by 5.3 per cent from 2017-18 to 2018-19 and there is marginal growth into 2019-20. With that in mind and the South Australian Budget still to come, we’ve asked the State Government to consider our 17 priorities.
We’re heading our wish list with payroll tax concessions and cuts. We don’t mean to sound ungrateful after payroll tax cuts were introduced on 1 January, but for any small to medium-sized business with a wage bill exceeding $1.7 million, there has been no relief.
In a perfect world, payroll tax would be abolished but Business SA recognises this would entail wholesale tax reform, including the GST, and it is unlikely to happen in a political environment where tackling necessary structural reforms is increasingly put into the too-hard basket. So we’re asking for more targeted payroll tax reforms, including to incentivise employers to take on PhD graduates from the science, technology, engineering and maths fields.
Our state budget wish list also includes a call for a Gas Efficiency Program to ensure appropriate assistance is available to businesses to mitigate against ongoing high prices. The GEP would encourage businesses to reduce their reliance on gas for boilers and other heat and steam generating plant and equipment. For manufacturers battling high energy prices and tough conditions, this could help turn their profit and loss statement from red to black.
We welcomed funding in the federal budget for regional roads, following on from last years funding of the Joy Baluch bridge duplication. We would like to also see a business case to duplicate the Augusta Highway from Port Wakefield to Port Augusta. That corridor is essential for businesses which need to transport products to the Spencer Gulf Cities and beyond, ensuring they will be able to do so more efficiently and on a safer road.
Human services (aged care, community and disability sectors) is the largest contributor to gross state product and has had the greatest employment growth over the past decade. The industry is going through significant transition and we would like to see funding to assist with informing service delivery and facilitate industry collaboration.
Our 17 priorities also include support for ongoing trade missions and our own Export Ready Program. We know the purse strings are tight, but if we can help all businesses grow, every South Australian taxpayer will benefit.
This article was originally published in the South Australian Business Journal on Tuesday 9 April 2019.