Key takeaways

• Focus on hospitals and schools.
• Health spending is 31% of the 2024-25 budget’s operating expenses.
• Infrastructure spending program has an added $4.9bn for targeted new investments in critical areas.
• The already announced Commercial and Industrial Property Tax (CIPT) regime is on the horizon.
• Delay of Airport Rail link.
• Payroll Tax threshold to be lifted to “make things easier” for small business.

What does the State Budget mean for you?

Property & infrastructure

Payroll Tax

Contributors

William Zhang

Blake Rogers

The post VIC State Budget 2024/25 appeared first on SW Accountants & Advisors.

Key takeaways

• Although there are no key tax measures introduced, direct property taxes will continue to be the source of over 50% of new revenue for the Victorian Government due to increased transaction volume and rising land values (although this is expected to be tampered by forecasted interest rate rises).
• A new Victorian Future Fund will be established to manage the fiscal impact of COVID 19. It will initially be funded from the VicRoads Modernisation joint venture and is expected to have a balance of around $10bn. Investment returns from the Fund is to be quarantined and returned to the Fund to help offset the current debt and return the Budget to surplus by 2025-2026.
• There is a clear focus in this Budget to repair the health system. Included in the Budget is more than $12bn of health-related expenditure including the training and hiring of additional healthcare workers and paramedic staff, funding for Ambulance Victoria to meet growing demand for services and investment to cut surgery waiting lists.
• The two-year Sick Pay Guarantee pilot program will receive $246m in funding to assist provision of a payment of up to five days of sick or carer’s pay at the national minimum wage for insecure work (casual employees).
• $250m provided for a one off $250 Power Saving Bonus to all Victorian households using the Victorian Energy Compare website to locate the cheapest electricity deal. The scheme will run from 1 July 2022 to 30 June 2023.
• A commitment of $111m to support Victoria’s tourism and major events.
• The Victorian Government has allocated $1.8bn to the school building project and plans to continue upgrading schools until it achieves its intended target of 100 new schooling facilities by 2026. The program includes upgrades to 65 schools including 36 special schools, building 13 new schools, additional stages at four more schools, and expanding capacity at two schools to meet enrolment demand.
• The Victorian Government also plans to invest $5bn in early three-year-old childhood education by increasing universal educational access for disadvantaged families as well as providing support to individuals from diverse backgrounds and $131m to assist students from rural areas to access four-year-old early childhood services.

For full overview of the infrastructure measures see our breakdown here.

Victorian Industry Fund to support Victorian Businesses

The Government has introduced a $120m fund to support the advancement of domestic manufacturing and other high priority sectors. Some of the initiatives to be supported by this Fund include:

• $40m to provide grants to support rapidly growing businesses
• $40m of targeted financial incentives to attract investment into Victorian businesses
• $20m for an equity investment pilot fund to attract highly innovative companies particularly in areas such as medical technology
• $7m low-carbon manufacturing grant program to help Victorian manufacturers to compete globally in the renewable energy space
• $4.5m for 300 digital jobs for manufacturing internships to help train Victorian workers in this industry. 

Significant Tax Measures

No significant new tax measures were announced in the 2022/23 Budget although there were minor amendments in relation to:

• Equalisation of gambling tax rates for electronic gaming machine operators

• Exemption from motor vehicle duty for wheelchair accessible commercial passenger vehicles that provide unbooked services.

However, as noted above, the State Taxes are to be a major source of revenue for the Victorian Government. The table below shows the annual revenue expected from State Taxes over the next 4 years.

Opportunities

The opportunity for businesses may come from the expected economic growth although this is not anticipated to be significant. Business sectors such as Medtech, pharmaceuticals and manufacturing should benefit from the increase in funding.

Did the VIC Budget measure up to expectations?

The Budget fell short of providing the required assistance to boost businesses which are facing significant uncertainties.

The Government’s commitment to repairing Victoria’s health system in needed and welcomed. However, the Government has not sought to increase property taxes to decrease the State’s debt and is instead relying on solid economic growth to repair the budget.

Please reach out to one of our experts below for assistance navigating the implications and opportunities this Budget presents for you, your business and your industry.

Contacts

Abi Chellapen

Daren McDonald

Stephen O’Flynn

The post VIC State Budget 2022/23 appeared first on SW Accountants & Advisors.

Significant measures

New infrastructure spending:

• $1.6bn for construction and development of new schools and school upgrades
• $1.6bn for construction and development of new hospitals, health facilities and related upgrades
• $2.6bn investment over 4 years in the Commonwealth Games 2026 which includes funding for building and upgrading sporting venues and related supporting infrastructure
• $991m investment in improving Victoria’s roads and rail
• $1bn to fund low interest loans for community housing agencies to deliver social and affordable housing.

Key continuing initiatives from prior Budget announcements:

• Victoria’s Big Build: an average $21.3bn a year over the budget and forward estimates, reflecting the continuation of major productivity-enhancing projects such as the North East Link, the Metro Tunnel, the West Gate Tunnel, the Melbourne Airport Rail, the Geelong Fast Rail, the Suburban Rail Loop and the removal of 85 level crossings by 2025
• $6bn Big Housing Build package – continued investment in new social and affordable homes
• Stamp duty concessions and exemptions for residential property transactions, particularly homeowners
• Victoria’s HomeBuyer Fund of $500m, expanding the HomesVic Shared Equity Initiative by contributing equity to the purchase price for eligible first home buyers
• Continued concessions to eligible BTR developments – a 50% land tax concession for up to 30 years and a full exemption from Absentee Owner Surcharge over the same period.

For all key takeaways of the Victorian State Budget 2022/23 see here.

Opportunities

• Continued focus on infrastructure spending; the 2022-23 Budget provides $22.2bn in output spending and invests $6.7bn in new and improved assets. Investment in hospitals, rail and roads, social and affordable homes will continue to provide opportunities for property sector professionals and contractors
• Wage growth and increased household income will continue to drive demand for residential housing
• Continued stamp duty concessions, coupled with the HomeBuyer Fund funding is also likely to support the demand for residential housing. These initiatives may also mitigate any settlement risk for developer
• Ongoing Build-To-Rent concessions will continue supporting new entrants into that market
• Constraints on construction labour and materials may increase demand and investment in new property technologies aimed at delivering efficiencies in output
• There are no new taxes introduced impacting property purchasers and owners.

Did the VIC Budget measure up to expectations?

There are no new tax relief measures introduced for Victorian property purchasers, developers nor landowners. The constraints on residential and non-residential construction output, such as ongoing shortages of construction materials and labour shortages are also acknowledged but not addressed by any direct Budget initiatives.

The increases in costs of construction will be driven by projected wage growth of minimum 2.75% in the construction industry. This coupled with increase in cost of construction materials, also due to shortages, will continue to increase the price of newly constructed property.

While there are tax measures aimed at providing relief to homeowners (potentially neutralised by today’s interest rate hike) there is little relief provided in the Budget for the rest of the property sector participants such as property investors and developers.

Please reach out to one of our experts below for assistance navigating the implications and opportunities this Budget presents for you, your business and your industry.

Contacts

Daren McDonald
Director, Chair of Property &
Infrastructure Industry Group
SW

Matt Birrell
Director, Tax
SW

Sejla Kadric
Director, Private Business Client Advisory
SW

The post VIC State Budget 2022/23 – Property & infrastructure appeared first on SW Accountants & Advisors.

Long-term health reforms, growing demands for health services, the advent of new technologies and shifting social and community expectations also pose unique challenges for the sector. 

Leading providers of advisory, audit and tax services, the SW team offers financial services to the health sector, with expertise spanning across:

• hospitals
• aged care facilities
• pharmacies
• medical practitioners
• GP registrars
• government agencies, and
• allied health services.

Our Health services

We specialise in accounting, financial and acquisition advice, succession and estate planning, ratio analysis, benchmarking, automation, valuations, and business improvement strategies.

Our team also has extensive experience working with medical research, manufacturing, wholesale and technology companies, meaning you can rely on our understanding of specific medical sector technical issues that can arise. 

Industry Associations

We maintain strong alliances with key industry bodies and major wholesalers and are appointed to specialist valuation panels by Australia’s leading banks. Our valuations team has more than 20 years’ experience delivering valuations and preparing PPA reports to the health sector. 

The post Health appeared first on SW Accountants & Advisors.

Whatever your needs and choices, without good advice and an effective plan, the choices can be confusing and overwhelming. And this may lead to poor decision-making – especially if you have never given aged care any thought.

Think back to the first time you attempted anything. How well did you do? How long did it take you to work out how to do it and how many mistakes did you make along the way?

Some tasks are too complex and too important to do on your own. Navigating the way through aged care and the jargon is not easy – especially if decisions are being made in a time of crisis and emotions are running high. When aged care decisions go badly, the stress can lead to family conflicts, fuelled by the Three G’s of aged care® (as identified by Aged Care Steps) – grief, guilt and greed. Mistakes can be costly.

As an example, here are three key mistakes people make when they don’t get advice:

1. Selling the home without understanding the consequences
2. Being afraid to pay a lump sum for residential care accommodation (called a refundable accommodation deposit)
3. Not generating enough cashflow.

You might be looking for advice for yourself or for a family member. Or you might want to think ahead to ensure you have covered the future possibilities so you can plan for quality of life, even when care needs start to creep in.

Let us take away some of the stress. Contact our office today and speak to Iggy Moro.

Disclaimer: The information in this article is general and does not take into account your particular circumstances. We recommend specific financial, tax or legal advice be sought before any action is taken to apply the rules to your specific circumstances. Refer to the relevant Product Disclosure Statement before investing in any product. Aged Care Steps ABN 42 156 656 843 is holder of AFSL 486723. Current as at 1 December 2020.

The post Are you worried about aged care needs? appeared first on SW Accountants & Advisors.