Victorian State Budget 2021: summary for small-medium business

About the Author: Ashley Thomson
Ashley Thomson

I’m here with the COVID-19 continuity update for Australian businesses on 25th November.

Victoria’s state budget 2021 is being called the “hard hats and high-vis” budget, with its heavy focus on the construction sector.

The are key advantages for many Melbourne businesses including Tenfold coaching clients, and I’ve highlighted some of them in today’s briefing:

  • New Jobs Tax Credit
  • Annualised payroll tax
  • Stimulus for building and construction
  • Stamp duty discount
  • R&D business loans
  • Expansion of the solar rebate and scheme


New Jobs Tax Credit

A payroll tax credit is intended to incentivise businesses to hire more staff. Businesses with payrolls less than $10 million will be eligible for 10 cents for every dollar of wages paid in 2020-21 and 2021-22 above the previous year’s wages.


Annualised payroll tax

The annual reporting threshold for businesses registered for payroll tax in Victoria has been increased from $40,000 to $100,000. This means that if your annual payroll tax is less than $100,000, you’ll only have to report once per year instead of every month. This is expected to start from 1 July 2021. This is great for many smaller clients who won’t have to report on payroll tax EVERY month, thereby saving you administrative time and effort.


Stimulus for building and construction

As previously mentioned, $5.3B for public housing with 12,000 homes over the next 4 years, creating 43,000 jobs. Construction on some projects will start immediately and 75% the funding will be allocated to Melbourne metro.

Other stimulus includes:

  • $3B for school upgrades, including more than 4,830 jobs related to projects in metropolitan Melbourne; and
  • $112 million to upgrade energy systems for 35,000 social housing homes.

The social housing package will use social procurement targets to hire women, Aboriginal Victorians, people with disability, and Victorians from diverse backgrounds. Your business may have a competitive advantage when bidding for work if you have a workforce that includes employees from these targeted areas.


Stamp Duty discount

Another stimulus for the construction sector comes by way of the stamp duty discount.
People who buy residential properties for under $1 million before June 30 2021, will get a waiver of 50% stamp duty. This discount for new builds will likely stimulate residential construction in the volume building sector.

There is also a 25% discount on stamp duty for existing houses under $1 million bought before June 30 2021.

In addition to the flow on effect to other areas that support and service the construction sector, it will also serve to draw low end builders and trades back to the market they specialise in and pull them away from other projects where they may have caused issues with their cheaper pricing.

A 50% stamp duty concession will also apply to the purchase of commercial and industrial properties in regional Victoria.


R&D business loans

$50 million in low-interest R&D Cash Flow Loans will be available to Victorian small-medium enterprises that currently qualify for the Commonwealth’s R&D Tax Incentive.

The R&D cash flow loans will support businesses to pay up to 80 per cent of their forecast refundable Federal Government Research and Development Tax Incentive offset.


Solar rebate and scheme expansion

$45.9M will go to expand the solar panel rebate and loans scheme to small businesses to help them manage their energy costs. Targeted incentives will be provided to facilitate engagement in the Victorian Energy Upgrades program. This will benefit businesses as consumers of energy, and will also benefit some of our clients that provide solar services.

While there are many points of good news in this budget for Victorian small businesses, it’s also prudent to be aware that it will stimulate more competition. Money is a magnet; operators who have not previously been active in a sector will be attracted by the opportunities from the stimulus.

As the Tenfold business coaches and I hear more about how each of these initiatives will be rolled out, I’ll bring you the details so that you’re positioned to take advantage of them. Often it can mean a subtle change to the strategy or the way you go about things that can make you eligible or allow you to benefit from the stimulus.



Ashley Thomson B.Eng(Hons), Grad. Dip. Mgmt, MEI
Managing Director
Tenfold Business Coaching