Victorian State Budget Summary

On Tuesday 24 November 2020, Victorian Treasurer handed down the 2020/21 State Budget. It’s been billed by many commentators as a game-changing tech budget, and it contains many welcome measures that will benefit Victorian startups. Our team are happy to discuss these measures with you, however the following is a brief summary of some of the key points.

Breakthrough Victoria Fund

$2 billion has been allocated to the Breakthrough Victoria Fund, providing cash to local businesses for research and development, promoting business innovation and driving the commercialisation of R&D outcomes. This fund will focus on life sciences, food and agriculture, manufacturing, clean energy and digital technologies.

There is a further $80 million in funding committed to targeted investments incentives to attract international business to the state.

Research and development

$50 million has been pledged to an R&D cashflow loans initiative. Small businesses and start-ups claiming the Research and Development Tax Incentive will have the ability to apply for low-interest loans from the state government for up to 80% of the forecast R&D Tax Incentive offset.

$13 million has been allocated to promote cooperation in R&D and commercialisation. Details of these measures are yet to be announced.

Payroll tax credit

The state government has budgeted $836 million for the New Jobs Tax Credit, encouraging small and medium businesses to increase employment by re-hiring staff, restoring staff hours or supporting new jobs. For the 2020/21 and 2021/22 financial years, eligible businesses will receive a tax credit of 20 cents for every dollar of Victorian taxable wages that is additional to those paid for the previous financial year.

The New Jobs Tax Credit is additional to payroll tax reliefs including:

  • Deferral of 2020-21 payroll tax payments for up to 13 months following the standard due date, where the employer had less than $10 million in Victorian taxable wages for 2019/20.
  • A refund or waiver of 2019/20 payroll tax for employers with Victorian taxable wages of less than $3 million.

Victorian Startup Capital Fund

$60.5 million in funding has been earmarked for the Victorian Startup Capital Fund. This investment will be matched by private sector investors. It is expected that the fund of up to $120 million will be invested into VC funds that will invest in early-stage startups creating business growth and of course jobs.

Women’s Angel Sidecar Fund

A $10 million fund will be established to help female entrepreneurs access start-up capital. This fund will offer up to $250,000 in co-investments into women-led start-ups.

Business growth and emerging industries

A range of measures were introduced geared toward promoting growth and emerging sectors, these include:

  • $60 million in funding for the new Manufacturing and Industry Development Fund
  • $65 million to modernise and grow Victorian agribusiness, including the Agriculture Technology Regional Innovation Network
  • $12.2 million to assist small businesses to innovate and digitise through the Small Business Support Toolkit
  • A $31.8 million export recovery plan to help showcase Victorian businesses to the world ensuring an integrated approach to trade and export opportunities.

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