The new budget set down this week by the NSW Government brings some respite for publicans, with an incentive toward on-site betting, and cuts to payroll tax.
Beginning 1 January 2019, any punter placing an online bet within NSW will pay a 10 per cent ‘Point of Consumption Tax’ (PoCT).
The tax applies regardless of where the operator is based, aiming to catch companies such as Sportsbet, CrownBet, and Bet365, which are registered in the Northern Territory specifically to take advantage of laws there.
The Northern Territory and Tasmania are now the only regions without some form of this taxation. Victoria last month announced an eight per cent PoCT, expected to generate around $30m annually.
South Australia introduced a 15 per cent PoCT last year. Queensland is set to begin theirs at the same rate in October, Western Australia will follow suit in 2019 and the ACT plans to do the same.
In NSW, a tax-free threshold of $1m will apply to all operators, and two per cent of all net wagering revenue will go to the racing industry, in line with the Victorian scheme.
“This decision will resolve the disconnect between the jurisdiction where gambling activity occurs and where it is taxed,” stated NSW treasurer Dominic Perrottet.
“We also want to make sure that the Racing Industry is no worse off under these changes, which is why we have taken steps to ensure that they share in additional revenue and that existing parity arrangements are unchanged.”
The NSW Government took in around $2.3 billion in gambling taxes in 2017. The PoCT is expected to generate $40 million toward FY19, and bring $100 million in the first full financial year of FY20.
The budget has also heralded a reduction in payroll tax, with the tax-free threshold set to rise.
The point at which businesses begin paying payroll tax will rise in FY19 from $750k to $850k, to $900k in FY20, $950k in FY21 and $1m in FY22.
Employers will save up to $5,450 in FY19, rising to $13,625 in FY22.
Economists have described payroll tax as a “regressive tax” that penalises businesses for growth and stifles employment.
The budget also draws criticism by US ratings giant Moody’s, which this week described it as “credit negative”, pointing out “rising debt levels” by comparing average annual growth in expenses over the next four years of 3.2 per cent with revenue growth of 2.5 per cent.
It says the nationwide infrastructure boom has seen the combined Federal and state government debts approach $1 trillion for the first time.
Net financial liabilities, which include superannuation and the debt of state-owned corporations, is on track to reach $944bn in 2021, according to The Australian.
NSW and Victoria remain the only states with AAA ratings from both major agencies, also making the biggest contribution to the increase.