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State Government announces one year delay to Payroll Tax Exemption abolition for screen industry

24 September 2021
Behind the scenes of Operation Buffalo, photo by Matt Nettheim
Behind the scenes of ABC TV series Operation Buffalo in the South Australian Outback, photo by Matt Nettheim.

The State Government has announced that the abolition of Payroll Tax Exemption and Ex-Gratia Relief for the screen industry, which was announced in the 2021-22 State Budget, will be delayed by one year to allow producers to transition to the new arrangements.

As part of the 2021-22 Budget the State Government announced that the payroll tax exemption for wages paid or payable by eligible motion picture production companies under Schedule 2, clause 17 of the Payroll Tax Act 2009 would be abolished from 1 July 2021. The additional revenue expected to be received as a result of this amendment and other changes to associated ex-gratia relief was used to fund a $1.6 million increase in the Screen Production Fund from 2021-22 administered by the SAFC to support the production of screen content in South Australia. 

As a transitional step to the new arrangements, the Government has taken the decision to delay the abolition of the payroll tax exemption for eligible film productions by one year to 1 July 2022.

This will enable film producers who have put in place arrangements to commence film production shortly and have arranged film finance on the basis of being eligible for payroll tax exemptions to proceed with film production without the need to renegotiate film finance. It will also provide a clear date that will enable film producers to plan when payroll tax exemptions are no longer available.

Under the revised arrangements, eligible motion picture production companies will continue to be eligible for a payroll tax exemption on wages paid during 2021-22. Under the revised Budget Measures Bill, motion picture production companies would be required to pay payroll tax on wages above the payroll tax threshold from 1 July 2022.

The proposed delay will not impact the funding to the SAFC’s Screen Production Fund in 2021-22. The State Government has retained its commitment to increase the funding to the Fund in 2021-22 while the transitional arrangements are in place.

The 2021-22 Budget also included the abolition of associated ex-gratia relief for wages paid or payable in circumstances where the criteria for relief under the legislated payroll tax exemption for feature films are not met. In line with the transitional arrangements for the legislated payroll tax exemption, the abolition of ex-gratia relief will also be delayed by one year to 1 July 2022 to support the film and television industry.  

Applications for ex-gratia relief in respect of wages paid or payable to 30 June 2022 will be considered by the Treasurer on a case by case basis consistent with current practice.

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