Key 2022-23 Queensland Budget measures affecting SMEs

The next Queensland State Budget for 2022-23 has been handed down, and includes key changes to payroll tax, transfer duty, land tax and infrastructure.

Payroll Tax

Small and medium businesses, who have annual taxable wages between $1.3 million and $10.4 million will see an increase in payroll tax deductions available against their payroll tax liabilities. This is estimated to provide benefit to more than 12,000 Queensland businesses.

This budget also includes a one-year extension to the 50% payroll tax rebate on apprentice and trainee wages. This rebate will now end on 30 June 2023. As a reminder, it is worth noting that eligible wages paid to apprentices and trainees are exempt from Queensland taxable wages.

Transfer Duty on Small Business Restructures

Small Business Restructures, generally into a corporate structure, can provide multiple tax and structuring benefits. Since 7 September 2020, a public ruling has provided relief from transfer duty on eligible restructures for small businesses.

The arrangements included in this public ruling have now been set out in proposed amendments to the Duties Act 2001 (Qld). Practically, it is expected this relief, once contained in the legislation, will operate the same way as the public ruling measures.

Land Tax

Under proposed new land tax legislation, Queensland land tax liabilities will be calculated based on a taxpayer’s Queensland and Interstate landholdings. This is an update to the current method, where the land tax liability is only based on a taxpayer’s Queensland landholdings.

The land tax liability will then be calculated as the taxpayer’s notional land tax, multiplied by the taxpayer’s non-exempt Queensland landholdings as a proportion of their non-exempt Australia-wide landholdings.

There will be procedures in place for taxpayers who own interstate land to notify the Queensland Revenue Office of their interstate landholdings each year, to enable accurate calculation of their land tax liability. These measures will have the greatest impact on those property investors which have major landholdings interstate, as they will likely see an increase in their Queensland land tax liability.

Unlocking Housing Supply

Given the current housing crisis, the Queensland government has budgeted $200 million to invest in building essential infrastructure.

This funding, which will partly be supplemented by contributions from property developers, will go towards infrastructure needs of areas which are experiencing major growth, including the Sunshine Coast, Ipswich, Logan, Moreton Bay, Brisbane, Redland and the Gold Coast.

This investment is expected to encourage expansion of housing and land projects in these areas, to combat current housing supply issues.

Other Measures

Other budgetary measures, which may have an indirect though positive impact on the small business sector include;

• Health - $23.6 billion has been allocated to the state’s health system for this budgetary period, which includes a commitment to hire over 9,000 new doctors, nurses and paramedics to the frontline, as hospital staff shortages peak
• Mental Health – With the impacts on mental health of COVID-19 still being very much present, the government will aim to improve mental wellbeing through spending $1.64 billion over the next five years. Areas this spending will occur, include staffing and additional training.
• Tourism - $66 million has been pledged from this year’s budget to support tourism and growth recovery efforts, to aim getting back to pre-pandemic levels. This is a major boost for the hospitality sector, which is been one of the hardest hit during the past two and a bit years.