To help businesses that are in financial stress as a result of COVID-19, the Federal, State and Territory governments have all introduced business stimulus packages. To help navigate the maze, we outline the different initiatives below.
Along with trusted advisers’ advice and support, these initiatives will go a long way to helping our clients who are struggling to survive in these challenging times.
FEDERAL GOVERNMENT INITIATIVES
The JobKeeper Payment Scheme
On March 30, 2020 the Federal Government announced the $130 billion JobKeeper Payment Scheme to help businesses impacted by the coronavirus continue to pay their employees.
Applications opened on April 20, 2020 for COVID-19 affected employers whose incomes have dropped by 30% or more compared to the same period last year to claim a fortnightly payment of $1,500 per eligible employee for a maximum of six months, commencing March 30, 2020.
This payment scheme includes full and part time workers including those who have been stood down or re-hired, casual workers who have been employed for at least the past 12 months and self-employed individuals. Enrolment for JobKeeper payments should be submitted by April 30, 2020 and employees must sign a JobKeeper Employee Nomination Notice, accessed here.
A mandatory code of conduct for commercial tenancies
This code was announced on April 7 for commercial tenancies to assist businesses impacted by COVID-19.
The code imposes a set of good faith leasing principles to enable landlords and tenants that are an eligible business negotiate tailored and appropriate temporary leasing arrangements based on each business’s current circumstance to help ensure business continuity during the crisis and the recovery period.
Further details and leasing principles are here.
Cash flow boost for employers
The government is providing a tax-free payment from $20,000 to a maximum of $100,000 to eligible small and medium-sized businesses with aggregated annual turnovers under $50m. For further information visit Boosting Cash Flow for Employers.
A 15-month investment incentive is being introduced via accelerating depreciation deductions for eligible businesses with aggregated turnover below $500m.
Instant asset write-off threshold increase
The Instant asset write-off threshold has been increased from $30,000 to $150,000 for eligible businesses. Further information here.
An overview of State and Territory Governments’ economic support and stimulus packages:
NEW SOUTH WALES
The NSW Government has extended its stimulus package’s payroll tax relief and business fees waivers to include:
- Small business COVID-19 support grants of up to $10,000 to eligible NSW small business owners who have between 1-19 employees and a turnover of more than $75,000 and a payroll below $900,000. Apply for a grant here
- An SME guarantee scheme which guarantees 50% of the value of eligible business loans to SMEs. The maximum loan value is $250,000 and there will be a repayment-free period of six months. Further information here
- $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 trades
- $500 million to bring forward capital works and maintenance
- Business Connect. This program provides practical and highly subsidised advice from accredited business advisors to help you start or grow a small business. Consultations can be by phone or face-to-face. To choose a business advisor and access workshops and events click here
For further information, click here
The Victorian Government announced a $1.7 billion economic survival and jobs stimulus package which includes the following support for businesses:
- Full payroll tax refunds for the 2019-20 financial year to small and medium-sized businesses with payroll of less than $3 million, resulting in $550 million back to businesses who need it
- Small and medium-sized businesses with payroll of less than $3 million will also be able to defer any payroll tax for the first three months of the 2020-21 financial year until 1 January 2021, resulting in the freeing up of a further $83 million in cash flow
- Commercial tenants in government buildings can apply for rent relief
- 2020 land tax payments will be deferred for eligible small businesses
- The Government will pay all outstanding supplier invoices within five business days, resulting in the release of up to $750 million into the economy earlier
- The hospitality sector will be supported by waiving liquor licensing fees for 2020 for affected venues and small businesses; and
- $500 million will be provided to establish a Business Support Fund. The Fund will support the hardest hit sectors including hospitality, tourism, accommodation, arts and entertainment, and retail.
For more information click here
The Queensland Government announced a $4 billion package to help Queensland manage the impacts of the Coronavirus which includes the following support for businesses. It includes:
- $500 million loan facility (Queensland COVID-19 Jobs Support Loans) to support Queensland businesses impacted by the Coronavirus to retain employees and maintain their operations.
- Payroll tax support
- Supply chain support and assistance for businesses who are having difficulty accessing suppliers to continue to operate, employ and meet their customers’ needs
- COVID-19 business support including financial workshops in partnership with local bodies, business mentoring and a dedicated small business hotline to access information and referral for support services
- Support for tourism operators and hospitality providers:
- waiving application fees for some variations to liquor licences;
- waiving registration renewal fees for Inbound Tour Operators;
- waiving of daily fees for commercial activity agreements and permits;
- rebate on Marina Charges and Passenger Levies; and
- deferral of Tourism Lease Rent Payments
- Support for agriculture and fisheries industries with market diversification and resilience grants (MDRG) to support activities including (but not limited to) market evaluation studies, market visits, training, new equipment such as refrigeration or cryovac machines, and boat modifications necessary to meet new market requirements
- A $27.25 million immediate industry recovery package to assist local government, business and industry with resilience and recovery strategies to deal with and mitigate the impact of the Coronavirus
- Support for exporters through the $1.1 million ‘Market Ready’ initiative
For more information click here.
The SA Government has introduced a second stimulus package comprising the $300m Business and Jobs Support Fund and $250 community and Jobs Support Fund which include significant payroll and land tax relief and the waiving of liquor licence fees for 2020-21 for coronavirus-impacted businesses.
The Payroll tax relief, which is expected to assist up to 2,400 businesses between April and September 2020 (an average saving of $25,000) includes:
- A six-month waiver for all businesses with an annual payroll (grouped) up to $4m
- A payroll tax waiver for eligible businesses from April to September
- Employers with grouped annual wages over $4m able to defer payroll tax payments for six months on demonstration of significant impacts on cash flow due to coronavirus
- The Land tax relief will enable Individuals and businesses with outstanding quarterly bills for 2019-20 to defer payments for six months and the Land Tax Transition Fund relief will be increased from 50 per cent to 100 per cent for eligible investors.
The WA Government’s small business relief features:
- $17,500 payroll grants for small businesses with a payroll between $1m and $4m which will be paid from July 2020 by cheque (ensure your postal details are current here).
- The $1m payroll tax threshold brought forward by six months to 1 July 2020.
- Payroll tax will be waived for four months for businesses with annual wages under $7.5m (this replaces the previous payroll deferral measure).
- Waiving of rental payments for small businesses in State Government-owned buildings for six months.
- One-off $2,500 credit on electricity bills for eligible small businesses.
- Power and water disconnections will not occur and interest will not be charged on deferred payments until 30 September 2020 for eligible businesses.
- Affected businesses can apply for interest-free payment arrangements and for late payment penalties to be waived for a range of taxes and duties including payroll tax, transfer duty, landholder duty, vehicle licence duty or land tax
- A range of business licence fees have been waived including liquor licence renewal fees for 2020 and refunds given to businesses that have already paid
Further information and details here.
The Tasmanian Government has followed its round one $2500 Small Business Emergency Support Grants with a $420m economic stimulus package that will assist eligible small businesses, particularly those in the hardest hit sectors. The package features:
- A Business Continuity Grant: One off grants of up to $750 are available for eligible businesses.
- Small Business Hardship Grants of $15,000 for eligible businesses.
- A Government Maintenance Program that offers $50m to fast track maintenance on public buildings over the next 12 months to help support local trades.
- Reduction in Government Agencies’ payment terms from 30 days to 14 days to assist small businesses’ cash flow.
- A Targeted Small Business Grants Program that provides a $5,000 grant for businesses that hire an apprentice or trainee in the tourism, hospitality, building and construction, and manufacturing industries.
- A Youth Employment Scheme that provides a payroll tax rebate for one year for eligible businesses.
- $80,000 Human Resource and Industrial Relations Assistance from the Tasmanian Chamber of Commerce and Industry
Targeted industry assistance for the tourism, hospitality and fisheries sectors include:
- Payroll tax waivers for hospitality, tourism and seafood industry businesses for the last four months of 2019-20 and for other eligible businesses for April to June 2020.
- $20m in interest-free business loans to small businesses with a turnover of less than $5m to purchase equipment or fund restructuring operations. The loans will be interest free for three years.
- The waiving of a number of lease, licence and parks’ entry fees for tourism operators for April to June 2020.
- Waiving of annual fees and levies for the rock lobster, giant crab, fin fishers and abalone divers for 12 months.
- Liquor licence fees reduction and waivers including a 50 per cent discount on liquor licencing fees and a waiver of all application fees for the calendar year 2020.
- A $100,000 Tourism and Hospitality Training Fund
- Holiday at Home Campaign: $1m for Tourism Tasmania to develop a local holiday campaign to encourage Tasmanians to support local tourism
For further information on Small Business Loans, contact Business Tasmania on 1800 440 026 or visit www.business.tas.gov.au/coronavirus_information
A second phase $50m fund to support small business has been added to the Territory’s initial Jobs Rescue and Recovery Plan.
The fund includes:
A $50m Small Business Survival Fund to support eligible retail, hospitality, tourism and entertainment businesses via an immediate survival payment of between $2,000 and $50,000, or a rapid adaption payment of between $1,000 and $5,000.
A $20m Business Improvement Grant offering all businesses access to a $10,000 grant.
A $30m Home Improvement Scheme to enable local businesses to apply to supply goods and services to help fast-track around 5,000 home improvement projects
Additional details here.
Summary of the WA economic stimulus package for COVID-19 affected businesses.
$17,500 Business Grants
- Small and medium businesses whose annual Australian Taxable Wages are between $1 million and $4 million will receive a one-off grant of $17,500
- No applications are required as grants will automatically be paid from July 2020. There may be delays for taxpayers whose tax status changed during the 2018-19 assessment period or who commenced as new employers in 2018-19 and 201-20
- It is expected 6,200 WA businesses will benefit from the grant
- Employers, or groups of employers, who pay $7.5 million or less in Australian taxable wages can apply to defer their monthly payroll tax payments until 21 July 2020
- The payroll tax threshold will be increased to $1 million on 1 July 2020. This will benefit 11,000 WA businesses