Business SA: State tax breaks a welcome relief

Business SA is pleased its calls and advocacy on behalf of 3400 members and the wider business community were answered on several fronts in this year’s state budget.

While this week’s spike in coronavirus cases is concerning, Business SA encourages all employers to remain calm, vigilant and to double down on their COVID-safe management plans within their companies.

In the meantime, Business SA members have greeted this year’s state budget warmly.

In a difficult balancing act – juggling economic recovery with continuing COVID-19 uncertainty – Treasurer Rob Lucas delivered a strong performance and a budget that will steer SA to safer shores until a vaccine is delivered.

Business SA is pleased our calls and advocacy on behalf of our 3400 members and wider business community were answered on several fronts.

The $233m payroll tax program gets a big tick of approval. While payroll tax waivers from the June quarter were recently extended until December, the budget takes this much further by extending the waivers for businesses with wages under $4m until June 30, 2021.

Effectively a 15-month payroll tax holiday for businesses, this move is expected to support about 2400 businesses, saving them up to $210,000 each over this waiver period.

Large businesses with payrolls of more than $4m and still receiving JobKeeper from January 4, 2021, will also now get a six-month waiver, after having previously received a deferral only. This is expected to help 400 businesses, saving them, on average, $57,500 each over the six months. When times are tough and cash flow is short, businesses will no doubt breathe a sigh of relief at the savings.

However, for those businesses in the hardest-hit sectors, a tax holiday may not be enough, especially if they could be out of business by early next year if current government restrictions continue.

Back on the positive side of the ledger, Business SA is also pleased with the 12-month payroll tax waiver for companies that put on a new trainee or apprentice. This will provide a great incentive for businesses to hire more staff over the coming crucial months.

A second round of the $10,000 emergency cash grants for small businesses still affected by COVID-19 is also welcome, with the addition of a new $3000 grant for non-employing sole traders and partnerships who operate from a commercial premise.

These grants are expected to help about 7500 employing businesses and 2500 non-employing business.

Again, this is something that Business SA has advocated strongly for after sole traders and partnerships fell through the gap in the first round of emergency cash grants.

While the budget’s $16.7bn infrastructure program – highlighted by the expected completion of the North-South Corridor by 2030 – will provide certainty to business in the future. The challenge now will be to ensure as much as possible of these works stay local.

Business SA will be watching to ensure when it comes to the much-hyped $8.9bn “hybrid tunnel” project pie that “buy local” comes first.

For more in-depth, independent analysis of the SA Budget, visit or engage with Business SA via social media.

Martin Haese is chief executive of Business SA