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NSW Budget 2023-24: Key points for SMEs

On Tuesday, NSW Treasurer Daniel Mookhey unveiled the state budget for 2023-2024.

Here’s a brief overview of the initiatives outlined in the budget. The government has unveiled a series of budgetary initiatives for SMEs across NSW to boost their prospects and bolster the state’s economic vitality.

National energy bill relief

In collaboration with the Australian Government, the NSW Government rolled out the National Energy Bill Relief program in July 2023. This initiative is aimed at assisting over 300,000 eligible businesses consuming less than 100 MWh of electricity annually. These businesses will be granted a one-time relief payment of $650 towards their electricity bills during the 2023-24 fiscal year.

Revamping EV industry

The NSW Government is injecting a record-breaking $1.8 billion into revitalising the Electricity Infrastructure Roadmap, including a boost of $804.0 million for Renewable Energy Zones. They’re also establishing the Energy Security Corporation with $1.0 billion to promote stable and affordable renewable energy. Additionally, $263.5 million will fast-track electric vehicle infrastructure, a significant step towards widespread EV adoption, showcasing a strong commitment to a sustainable energy future in New South Wales.

Payroll Tax maintained 

An initiative within the Future Economy Fund will incentivize businesses in emerging industries to set up or expand in NSW through grant payments and payroll tax exemptions. These exemptions are expected to lower revenue by $51.0 million over the five years until 2026-27. This dependable tax environment offers SMEs a conducive atmosphere for long-term planning and investment.

Restructuring the Future Economy Fund

The Future Economy Fund, originally designed to support innovative businesses, is now undergoing changes to redirect unallocated funds towards creating 1,000 new apprenticeships. This initiative not only addresses the skills gap but also provides SMEs with a fresh pool of skilled labour.

New toll road policies

The NSW Government is delivering on its commitment to introduce a $60 weekly toll cap and truck toll multiplier relief as a first step towards comprehensive toll reform. The introduction of new toll road policies, including reduced tolls for businesses, can alleviate transportation costs for SMEs. This cost savings can improve their overall competitiveness and profitability.

Wages and workers

Frontline workers, such as nurses, paramedics, police officers, and others, have been recognised and rewarded with a 4.5% pay increase, benefiting over 400,000 public sector employees. This substantial raise, the largest in a decade, not only uplifts the workers but also injects more spending power into local economies, which can greatly benefit SMEs through increased consumer spending.

Apprenticeship registration rebate

The rebate program for apprentices, offering a $100 vehicle registration rebate for first and second-year apprentices, directly reduces financial burdens on SMEs employing apprentices. This incentive may encourage more SMEs to invest in apprenticeship programs.

FCA expresses disappointment 

The Franchise Council of Australia (FCA), a representative body for small businesses in the state, has expressed disappointment over the lack of action taken to address the existing cost and compliance burdens affecting the franchise sector, a vital part of the economy.

Despite these concerns, the FCA reaffirms its commitment to collaborating with the NSW Government to tackle these critical issues. It emphasizes the substantial economic contribution made by the franchise sector to local communities.

FCA CEO Matthew Monaghan stated, “While we understand the challenging circumstances that necessitate difficult decisions, we are disappointed on behalf of our predominantly small business members by the lack of targeted support. Small businesses within the franchise sector play a substantial economic role in their local communities.”

Monaghan continued, “Whether you’re in Gundagai, Orange, Sydney, or Wollongong, small businesses are affiliated with franchise networks along the high streets. These businesses have not only weathered the challenges of the pandemic but have also continued to support their communities and employ local residents. Unfortunately, today’s Budget does not provide significant relief for them.”

The FCA looks forward to constructive collaboration with the NSW Government to ensure a comprehensive understanding of the economic contributions made by its members and to advocate for much-needed support and relief, particularly considering their crucial role within their communities.

ARA calls for more SME support 

The Australian Retailers Association (ARA) has called for increased support for small businesses facing a cost-of-doing-business crisis. ARA CEO Paul Zahra acknowledged the NSW Government’s measures to assist those grappling with financial difficulties and highlighted that any steps taken to bolster NSW families’ finances are likely to positively impact the retail sector.

“Cost-of-living is a major concern for all Australians, and New South Wales is no exception. It’s encouraging to see the budget offering some relief, which is expected to stimulate the retail economy,” remarked Mr Zahra.

He further noted, “Initiatives like preschool fee relief, toll caps, and energy rebates for consumers will all contribute to freeing up household budgets, alleviating financial pressures, and potentially encouraging more discretionary spending.”

While acknowledging the budget’s focus on returning the state to a future surplus, Mr. Zahra expressed hope for greater support for small businesses facing unprecedented pressure due to rising costs and declining revenues.

“Small businesses are grappling with escalating costs and dwindling revenues, and they urgently need relief,” added Mr. Zahra. He also expressed the desire to see relief in terms of energy expenses, payroll tax, and workers’ compensation, or alignment of policies across state borders to reduce complexity for businesses.

The NSW government has also made announcements related to transitioning to net-zero emissions and strengthening supply chains, two key focus areas for the retail sector.

“The ARA is dedicated to a smooth transition to the low-carbon economy of the future, and we welcome the government’s announcements aimed at reducing the costs and risks associated with the shift from coal-fired generation to renewable energy sources,” Mr Zahra affirmed.

He also welcomed announcements regarding toll relief, which will lower costs for businesses, and investments in road infrastructure to maintain the supply chain’s efficiency in greater Sydney and regional areas, especially following natural disasters.

The ARA anticipates working closely with the Minns government and applauds measures already taken by the new government, including stricter penalties for individuals who assault retail workers.

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Yajush Gupta

Yajush Gupta

Yajush is a journalist at Dynamic Business. He previously worked with Reuters as a business correspondent and holds a postgrad degree in print journalism.

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