Shaping Victoria: leveraging local to access national
Let’s delve into the key funding announcements that will shape the economic landscape of Victoria with the handing down of the Victorian State Budget on 23 May 2023. From empowering small businesses and boosting employment opportunities, to supporting industry innovation and regional development. This budget aims to drive growth and leverages Commonwealth funding, while balancing a need to pay off debt accumulated during the pandemic.
From 1 July 2024 the Government will raise the tax‑free threshold for payroll tax from $700,000 to $900,000, with a further increase to $1 million from 1 July 2025. These reforms will save around 26,000 Victorian businesses up to $14,550 per year, and around 6,000 of those businesses will stop paying payroll tax altogether.
While it may not be enough to raise the broader challenges faced by small businesses, raising the tax-free threshold is a positive step. It will alleviate the burden on small businesses and stimulate economic growth and free up capital that can be reinvested or used for expansion.
Support for Industry and Innovation
The Victorian government will establish two new funds under the “Made in Victoria” banner to issue more than $36 million in grants and other funding. The goal of both funds will include leveraging businesses access to two major Commonwealth initiatives.
This includes $21.2 million to establish a Manufacturing and Industry Sovereignty Fund, providing grants to support the development, expansion, and retention of Victoria’s strategic manufacturing capability. This funding will be used to help businesses access the recently Federal legislated $15 billion National Reconstruction Fund (NRF).
The second fund is a $15 million Industry R&D Infrastructure Fund will also be set up this year to incentivise and leverage private industry investment in research and development and complement existing national R&D incentive settings.
Digital games and visual effects sector will get a $10 million rebate to attract new businesses to Victoria which is more than the space and defence industry get.
$4 million will be provided over the next two years to support Victoria’s defence and space industry and supply chains to secure major defence contracts.
$5 million will be provided for expansion of the Alice Anderson Fund, which supports women-led startups to leverage private sector capital. The Government will also introduce the Boosting Victorian Exports program to assist businesses in reaching international markets.
Lastly, the Victorian Government will also invest more than $900 million in medical research and a further $12 million to continue supporting the growing mRNA industry.
The budgets focus on regional development and agriculture recognises the importance of regional communities in driving growth.
$21 million to support the major redevelopment of the Bendigo Art Gallery and $7.3 million to deliver place-based economic and community development through the Latrobe Valley Authority, and continue the Ladder Step Up and Inclusive Employment Worker Transition programs.
Farmers will get a boost with this budget investing $49 million to enhance biosecurity protections and back producers to grow. This will include funding for pests and weed management, scholarships for hospitality workers and farm safety and well-being programs.
The government will invest $35 million to support disadvantaged jobseekers in Victoria by extending the Jobs Victoria Mentors program, supporting disadvantaged jobseekers and removing the barriers they face when it comes to finding work. $186 million will also go towards the expansion of the eligibility criteria for subsidised training courses, including Free TAFE, to make it more widely available and $12 million boost for the Apprenticeship Support Officers Program.
While Victoria’s reputation as the nation’s top location for major events gets a boost with a $23 million investment to expand the Major Events Fund. And a further $35 million to go towards supporting live music and community broadcasting, including around 10,000 gigs, getting more artists back on stage through grants for musicians to perform at live music venues as well as for music festivals, big and small. A more balanced approach that includes funding for community-based arts organisations would ensure a diverse and inclusive arts ecosystem.
Overall, the Victorian State Budget for 2023-24 presents funding highlights, including cleverly leveraging Commonwealth programs like the NRF and the R&D tax incentive. As more detail gets released we look forward to provide more detail to our clients.
For an overview of the Victorian 2023-24 budget go here.