FEDERAL GOVERNMENT & COMMONWEALTH OF AUSTRALIA
12 March 2020: Federal Government’s $17.6 billion economic stimulus package https://www.pm.gov.au/media/economic-stimulus-package
22 March 2020: Federal Government’s 2nd economic stimulus package https://www.pm.gov.au/media/supporting-australian-workers-and-business
Federal Government’s economic response to Coronovirus https://treasury.gov.au/sites/default/files/2020-03/Overview-Economic_Response_to_the_Coronavirus_0.pdf
Federal Government Support Measures for Businesses
Boosting Cash Flow for Employers
- Providing up to $100,000 to eligible small and medium-sized businesses, and not-for-profits (NFPs) that employ people, with a minimum payment of $20,000.
- These payments will help businesses and NFPs with their cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.
- Small and medium-sized business entities with aggregated annual turnover under $50 million and that employ workers are eligible.
- Employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000.
- An additional payment is also being introduced in the July — October 2020 period. Eligible entities will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments they have received. This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments.
Temporary relief for financially distressed businesses
- Providing a safety net to make sure that when the crisis has passed they can resume normal business operations.
- Temporarily increasing the threshold at which creditors can issue a statutory demand on a company and to initiate bankrupt proceedings against an individual as well as temporarily increasing the time companies and individuals have to respond to statutory demands they receive.
- Temporary relief for directors from any personal liability for trading while insolvent, and providing temporary flexibility in the Corporations Act 2001 to provide targeted relief from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health crisis.
- The ATO will tailor solutions for owners or directors of business that are currently struggling due to the Coronavirus, including temporary reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.
Increasing the instant asset write-off
- Increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
Backing business investment
- Introducing a time-limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions.
- Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. This measure will support business investment and is estimated to lower taxes paid by Australian businesses by $6.7 billion over the next two years.
Supporting apprentices and trainees
- Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for 9 months from 1 January 2020 to 30 September 2020.
- Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.
- Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
Support for Coronavirus-affected regions and communities
- $1 billion set aside to support regions most significantly affected by the Coronavirus outbreak. These funds will be available to assist during the outbreak and the recovery.
Support for immediate cash flow needs for SMEs
- Under the Coronavirus SME Guarantee Scheme, the government will provide a guarantee of 50 per cent to SME lenders to support new short-term unsecured loans to SMEs. The Scheme will guarantee up to $40 billion of new lending to SMEs.
Quick and efficient access to credit for small business
- Providing a temporary exemption from responsible lending obligations for lenders providing credit to existing small business customers. This reform will help small businesses get access to credit quickly and efficiently.
Reserve Bank of Australia — Supporting the flow and reducing the cost of credit
- The Reserve Bank of Australia (RBA) announced a package on 19 March 2020 that will put downward pressure on borrowing costs for households and businesses.
- The RBA announced a term funding facility for the banking system reducing funding costs for banks, which in turn will help reduce interest rates for borrowers.
- To encourage lending to businesses, the facility offers additional low-cost funding to banks if they expand their business lending, with particular incentives applying to new loans to SMEs.
For more information on the Australian Government’s Economic Response to Coronavirus visit
NEW SOUTH WALES
- $450 million for the waiver of payroll tax for businesses with payrolls of up to $10 million for three months (the rest of 2019-20). This means these businesses will save a quarter of their annual payroll tax bill in 2019-20.
- $56 million to bring forward the next round of payroll tax cuts by raising the threshold limit to $1 million in 2020-21.
- $80 million to waive a range of fees and charges for small businesses including bars, cafes, restaurants and tradies.
- $250 million to employ additional cleaners of public infrastructure such as transport assets, schools and other public buildings.
- more than $250 million to bring forward maintenance on public assets including social housing and crown land fencing.
- $500 million to bring forward capital works and maintenance.
City of Sydney
- A new series of small business grants worth $2m.
- A small business, creative and community concierge service to help businesses through the grant process and provide tips for a successful application.
- To ensure workers can access employment during this difficult time, the City will fast-track $23 million worth of future capital works projects.
- Previously announced rebate for the City’s commercial property tenants is now expected to rise to $16 million.
- $1.7 billion economic survival and jobs package.
- Full payroll tax refunds for the 2019-20 financial year to small and medium-sized businesses with payroll of less than $3 million – giving $550 million back to businesses who need it.
- Businesses will also be able to defer any payroll tax for the first three months of the 2020/21 financial year until 1 January 2021, freeing up a further $83 million in cashflow.
- Commercial tenants in government buildings can apply for rent relief – a move private landlords are also being encouraged to undertake – and 2020 land tax payments will be deferred for eligible small businesses.
- The Government will pay all outstanding supplier invoices within five business days – releasing up to $750 million into the economy earlier. The private sector is urged to do the same where possible.
- $500 million to establish a Business Support Fund. The fund will support the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail.
- The Government will work with the Victorian Chamber, Australian Hotels Association and Ai Group to administer the fund, which will help these businesses – which may not be eligible for payroll tax refunds due to their size – survive and keep people in work.
City of Melbourne
- grants to develop online and e-services.
- one-on-one advice and support through our expanded COVID-19 Business Concierge Hotline.
- halving rent for eligible tenants in Council-owned buildings for three months.
- suspending fees for Food Act registrations and street trading permits for three months.
- a new Rates Financial Hardship Policy.
- a virtual business support summit.
- $950 million payroll tax relief. Immediate payroll tax refunds will be provided for COVID-19 affected businesses. Eligible businesses can also apply for deferral until the end of 2020 and a payroll tax holiday for 3 months.
- No Queensland business impacted by COVID-19 will have to make a payroll tax payment in 2020.
- $500 million worker retraining and assistance to assist workers who lose their job or income with retraining, job-matching and other help to transition into jobs in the industries that are vital to get Queensland through this crisis. Businesses that need access to skilled labour to meet demand will also receive assistance under this initiative.
- A loan facility of at least $500 million, interest free for the first 12 months, is being created to support Queensland businesses impacted by COVID-19 to retain employees and maintain operations.
- $1 billion Industry Support Package to assist large businesses through this period to ensure they will be able to scale up and service the community when economic activity improves.
- $100 million electricity bill relief for small and medium businesses.
- $607 million stimulus package to support WA households and small businesses in the wake of COVID-19 including $114 million in additional measures to support small businesses.
- Small businesses that pay payroll tax will receive a one-off grant of $17,500.
- $1 million payroll tax threshold brought forward by six months to July 1, 2020.
- Businesses impacted by COVID-19 can defer payroll tax payments until July 21, 2020.
- Building on $760 million announced in the past few months to stimulate economy.
AUSTRALIAN TAX OFFICE
Options available to assist businesses impacted by COVID-19 include:
- Deferring by up to six months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise.
- Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to.
- Allowing businesses to vary Pay As You Go (PAYG) instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.
- Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities.
- Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.
Many banks have announced support measures for businesses affected by the Coronavirus outbreak. Businesses should contact their banks to find what support measures are available to them.