Coronavirus (COVID-19) Government Stimulus Packages For Business Owners
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Since 22 March 2020, the Federal Government has announced various coronavirus stimulus packages to help individuals and businesses that have been affected by the pandemic.
Here are some of the economic response to the coronavirus that the Federal Government has announced:
JobKeeper Payment
The Government announced a $130 billion JobKeeper Payment so that employers can keep their employees at their jobs.
| Details | Description |
|---|---|
| What is it? | Employers will receive a fortnight $1,500 payment before tax and paid for up to six months. The employers must ensure that their employees are to be retained in their business during this period. |
| Who can take part? | Companies Charities Non-profit Organizations Partnerships Trusts Sole Traders |
| What’s the eligibility? | Annual turnover is less than $1 billion and there’s a reduction in revenue of 30% or more since 1 March 2020 for a minimum of one month. Eligible employees include full time, part time or stood down and even casual employees who have been with their current employer for at least 12 months. |
Boosting cash flow for business
| Details | Description |
|---|---|
| What is it? | The government is providing tax-free cash flow boosts between $20,000 to $100,00 to help manage cash flow challenges and retain their employees. The amount will be credited to their business account on 28 April 2020. Once a business has lodged their activity statement, then the cash flow boost is automatically applied to their accounts. Even if the cash flow boosts are tax-free, if the business has received more cash flow boosts than what it is entitled to, the excess has to be repaid. |
| Who can take part? | Small to medium sized businesses Not-for-profit organizations Sole traders Partnerships |
| What’s the eligibility? | The above businesses can apply, regardless of when they were registered. Must have an active ABN on 12 March 2020. The aggregated turnover is below $50 million compared to the previous year’s turnover. Made eligible payments that business is required to withhold from. These payments include director’s fee, salary and wages, compensation payments, etc. Either derived business income in 2018-19 and lodged 2019 tax returns on or before 2020 OR made GST taxable, GST-free or input taxed sales since July 20018 and lodged relevant activity statements on or before 12 March 2020. |
Supporting apprentices and trainees
| Details | Description |
|---|---|
| What is it? | To help retain their trainees and apprentices, businesses can apply for a 50% wage subsidy for them during the 9 months from 1 January 2020 to 30 September 2020. Employers can be reimbursed up to $21,000 per eligible apprentice or trainee, which is $7,000 per quarter. |
| Who can take part? | Small businesses, including those using a Group Training Organisation, to help retain existing apprentices and trainees. |
| What is the eligibility? | Your business is employing less than 20 employees as trainees or apprentices. The trainee or apprentice must have been in training since 1 March 2020. Employers that re-engage an eligible out-of-trade trainee or apprentice can also apply. If the businesses cannot retain their apprentices or trainees during this period, the wage subsidy will apply to the new hire. Employers can register from early April 2020 and final claims for payments must be lodged by 31 December 2020. |
Providing temporary relief for financially distressed business
| Details | Description |
|---|---|
| What is it? | This proposes amendments to be made to the Corporations Act 2001 to provide temporary relief for businesses in financial distress, so that business can continue during the current scenario. It is a temporary provision that might last up to 6 months. |
| Who is it for? | Businesses that are financially distressed due to COVID-19. |
| What does it entail? | Temporarily increasing the minimum threshold for creditors to issue statutory demand on a company under the Corporations Act 2001 from $2,000 to $20,000 for 6 months. The time the debtor has to respond to a bankruptcy notice has increased to 6 months from the current 21 days. This extension will provide debtors to consider repayment options before being forced into bankruptcy. Directors will temporarily be relieved of personal liability for trading while insolvent. This will apply for six months. Debts incurred are still payable. The Treasurer has temporary instrument-making power in the Corporations Act 2001 to make amendments to the provisions of the Act to provide relief from specific obligations or modify obligations to enable compliance. This will only apply for six months and any instrument made under this will apply for six months until the date it was made. |
Increasing instant asset write-off.
| Details | Description |
|---|---|
| What is it? | The instant asset write-off threshold will increase from $30,000 to $150,000. This is applicable from 12 March 2020 to 30 June 2020. This will help businesses to immediately deduct purchases from assets which costs less than $150,000. |
| What assets are applicable? | Either new or second hand assets installed or used during this period. The threshold applies on a per asset basis, so you can write-off multiple assets immediately. |
| Who can take part? | Businesses with turnover of less than $500 million (up from $50 million), until 30 June 2020. |
Budget 2020: Full business write off for assets purchased and used before June 2022
Businesses will be able to write off the full value of new assets under the new measures presented in the 2020 federal budget.
This tax incentive will be available to 99% of all businesses, .i.e. those with turnover greater than $5 billion.
Eligible businesses are able to claim an immediate deduction of the full value of all new, eligible, depreciable assets of any value that are first used or installed before June 30, 2022 – subject to legislation passing parliament.
Treasurer Josh Frydenberg said the new measure builds on “the successful expansion of the instant asset write-off in our response to COVID-19” which is the $150,000 instant asset write-off scheme due to expire at the end of December.
As with everything to do with taxes, please seek qualified financial advice from a financial advisor or accountant.
Backing business investment
| Details | Description |
|---|---|
| What is it? | The Government is introducing a 15 month incentive by accelerating depreciation deductions. This will support business investment and economic growth over the short term. The business can deduct 50% of the cost of an eligible asset on installation. |
| What assets are applicable? | Eligible assets include new assets that can be depreciated under Division 40 of the Income Tax Assessment 1997 acquired after the announcement of and that were used and installed by 30 June 2021. It does not apply to second hand Division 40 assets or buildings and other capital works depreciable under Division 43. |
| Who is eligible? | The business has an aggregated turnover of less than $500 million. |
SME guarantee scheme
| Details | Description |
|---|---|
| What is it? | The Coronavirus SME Guarantee Scheme that will help small and medium enterprises to get access to working capital. The scheme is aimed at supporting up to $40 billion of lending to SMEs. The Government will guarantee 50% of new loans issued by eligible bank and non-bank lenders to SMEs. |
| Who can take part? | SMEs including sole traders and not-for-profit organizations. |
| What is the eligibility criteria? | A turnover of up to $50 million in the previous financial year (or likely to be less than $50 million in current financial year). The maximum loan size is $250,000 per borrower. The loan term is for 3 years. There will be an initial six month repayment holiday. Finance is unsecured, so the borrower does not have to provide any asset as security to get approved for the loan. |
| Which lenders are participating? |
There are lenders that are still pending approval. |
The government announced that the Coronavirus SME Guarantee Scheme is extended to 30 June 2021. The second phase of the scheme will come into effect from 1 October 2020 and the loan size will increase to $1 million.
SME Recovery Loan Scheme
This is an extension and expansion of the SME Loan Guarantee Scheme.
The SME Recovery Loan Scheme is designed to assist SMEs that are currently receiving JobKeeper.
The exisitng SME Guarantee Scheme is open to eligible borrowers until 30 June 2021.
To be eligible for SME Recovery Loan Scheme:
- The business is a recipient of JobKepper payment between 4 January 2021 and 28 March 2021.
- It is a small and medium-sized business with up to a $250 million turnover.
- Self-employed and non-profit businesses are eligible.
Loans will be available from 1 April 2021 and must be approved before 31 December 2021.
What changed?
- The government will guarantee 80% of the loan (which is up from the 50/50 split between the banks and government).
- The size of eligible loans is $5 million, up from $1 million.
- The loan term has increased to 10 years from 5 years. There is an option for a repayment holiday of up to 24 months.
- The maximum eligible turnover has increased from $50 million to $250 million.
For more details, please read the Treasury’s website on the SME Recovery Loan Scheme.
Early release of superannuation for sole traders
| Details | Description |
|---|---|
| What is it? | Sole traders can access up to $20,000 in their superannuation. They can access their superannuation of up to $10,000 before 1 July 2020, and a further $10,000 from 1 July 2020 until 24 September 2020. You do not have to pay tax on the amounts released. |
| Who is eligible? | A sole trader whose business was suspended or your turnover was reduced by 20% or more on or after 1 January 2020. |
| When to apply? | You can apply for the early release of superannuation from 20 April 2020. |
State governments’ COVID-19 stimulus packages
These packages were announced to help households and businesses affected by the coronavirus.
New South Wales
- A $1 billion Working for NSW fund to sustain business, create new jobs or retrain employees.
- Small and medium businesses can have payroll tax deferral arrangements for six months if the total wages for 2019-20 is more than $10 million.
- If total wages for 2019-20 is less than $10 million, annual tax liability is reduced by 25% when lodging reconciliation due on 28 July 2020.
- Furthermore, no payment is required for March, April or May of payrolls that are $10 million or less.
- The payroll tax threshold for all businesses has increased from $900,000 to $1 million as of 1 July 2020.
- $80 million allocated to waive fees and charges for small businesses like cafes, bars, restaurants, etc.
- Deferral of duty on lotteries and Keno for 6 months, including payments due from April 2020 to September 2020.
- Deferral of parking space levy for 6 months.
- Deferral of rent for six months for commercial and not-for-profit tenants with less than 20 employees.
These updates are as of 27 March 2020. To keep stay on top of latest updates, please visit the NSW Treasury website.
Victoria
On 13 September 2020, the Victorian government announced that it was investing $3 billion in cash grants, tax relief and support the cash flow of businesses that were affected by the ongoing restrictions.
These grants are available for business support:
- Up to 75,000 eligible small and medium sized business could get grants of $10,000, $15,000 or $20,000 depending on the size.
- For licensed pubs, clubs, hotels, bars, restaurants and other hospitality business, grants of up to $30,000 are available. Furthermore, liquor fees are waived until 2021.
- 30,000 eligible sole traders working in retail, food service, accommodation, gyms, etc. can get grants of up to $3,000
- Grants of up to $20,000 are available for alpine business to pay service charge to the Alpine Resort Management Boards.
- A competitive grants program of up to $3 million is available to support local business groups and chambers of commerce.
- The Victorian government and City of Melbourne have partnered together with a $100 million Melbourne City Recovery Fund. From the $100 million, $30 million in grants are allotted for SMEs to pay for equipment, converting spaces to hospitality zones, $30 million is allotted to support COVIDSafe events, and activities and $40 million is allotted to towards improving physical improvements like wider footpaths, bollards, etc.
- $87.5 million to support hospitality businesses prepare for COVID Normal once Victoria reopens, including helping adapt to outdoor dining.
- A $20 million voucher program for sole traders and small businesses to build their digital capability to adapt to online operations.
- A $15.7 million package to help Victorian exporters get their products to the market by providing solutions to logistics and supply chain issues, establish new trade channels, etc.
- $8.5 million to market and expand ‘Click for Vic’ campaign to encourage Victorians to support local businesses and promote Victorian producers.
- Businesses with annual taxable wages of up to $3 million will get payroll tax waived for 2019-20 financial year.
- Liquor licence fee renewal for 2020 is waived. Businesses that have already paid will get refunds.
- There is a $500 million Business Support Fund to support sectors that are the hardest hit like hospitality, tourism, retail, etc.
- The $500 million Working For Victoria Fund will assist displaced workers to apply for their job at other sectors by assisting in skill development or obtain immediate accreditation to commence work.
- Land owners that have at least one non-residential property and total taxable land holdings below $1 million can defer their 2020 land lax payment until 31 December 2020.
- Pay outstanding supplier invoices within 5 business days.
- The Victoria Government is working with commercial tenants in government buildings to apply for rent relief.
- If your business pays $6.5 million or less in taxable wages, then you can get a refund of your payroll tax for 2 months (November and December 2019). You will get a payroll tax holiday for three months (January to March 2020), and can also apply for a payroll tax deferral for 2020.
- If your business pays more than $6.5 million in taxable wages, then you can get a refund of your payroll tax for 2 months (November and December 2019), and can apply for deferral of payroll tax for 2020.
- Jobs Support Loan Scheme with loans up to $250,000 to help with carry-on expenses like wages, rent, and other related expenditure. This is a 10 year loan with a 2.5% p.a. fixed interest rate. No repayments or interest charged for first year, plus two years of interest only payments. P&I repayments will begin from the third year to the remainder of the loan term.
- With the Power Bill Relief, businesses can get a $500 rebate of energy bills if you consume less than 100,000 kWh. This is a $100m power bill relief package for small and medium businesses. It will automatically be applied on businesses’ electricity bills.
- $500 million allocated to assist workers who lost their jobs or income by retraining, job matching or transitioning them to jobs that are vital to Queensland during the pandemic.These jobs include working in healthcare, food production, transport, cleaning and mining.
- The $1 billion industry support package will help large businesses so that can scale up and service the community.
- Fee waivers for tourism businesses including waiver of liquor licence fees for businesses impacted by enforced shutdowns, registration of renewal fees for inbound tour operations, rebates on marina charges and deferral of tourism lease agreements.
- There will be a six month rent relief for businesses renting on government premises.
- Small and medium businesses with annual taxable wages between $1 million to $4 million will receive a one-off grant of $17,500. These grants will automatically be paid, so there’s no application required.
- If your business is paying $7.5 million or less in taxable wages, you can apply to defer the payment of the 2019-20 payroll tax until 21 July 2020.
- Payroll tax threshold will be increased to $1 million from July 2020.
- $25 million rent relief plan to waive rental payments for small businesses and not-for-profit organizations in Government owned buildings for six months.
- Small businesses will benefit from reduced electricity bills, with a one off $2,500 credit available for Sydney and Horizon Power customers who consume less than 50 megawatt hours per annum.
- $165 million in relief to support 10,700 businesses in payroll tax waiver for 4 months from 1 March 2020 to 1 June 2020., whose annual wages are less than $7.5 million in 2019-20.
- $100.4 million allocated to waive licence fees for small and medium businesses. These licences include those required for building services, plumbers, electricians, etc.
- Liquor licence renewal fees for 2020 is waived, and refunds will be given to business that have already paid.
- Businesses can apply for an interest free payment for penalties to be waived for payment tax, transfer duty, landholder duty, etc.
- There will be no disconnections to power or water due to late payments. Furthermore, no interest will be charged on deferred payments.
- Jobs Rescue Package which includes the establishment of $300 million Business and Jobs Support Fund and $250 million Community and Jobs Support Fund.
- Payroll tax relief options available. If your business has annual taxable wages of up to $4 million, you can get a six month payroll tax waiver from April to September 2020.
- Businesses and individuals can get a land tax deferral for the third and fourth quarter instalments for up to 6 months.
- There is an increase in existing land tax transition fund relief to 100% from 50%, based on existing relief criteria guidelines.
- Waiver on annual liquor licence fees for 2020-21 for on premises, residential, restaurant and catering, clubs, liquor production and sale, small venues, etc. General and hotel service holders who have a bottle shop will get reduced rates. If there is no bottle shop, a full waiver is available.
- There is a freeze, waive or cap on fees and charges for small business.
- Water and electricity bills will be waived for the first quarterly bill received after 1 April 2020 for small business on Tariff 22, 94, 82 or 75.
- Water prices will be frozen for the next financial year and electricity prices will be capped. Fees and charges are subject to Government Fee Units Act 1997 will freeze.
- Land tax is waived for 2020-21 for commercial property owners if the land tax is paid by business owners.
- Waive roads component of motor tax and vehicle registration.
- Payroll tax waiver for hospitality, tourism and seafood sectors, including businesses with payrolls less than $5 million.
- Boost funding for Rapid Response Skills initiative with an additional $6.3 million. Up to $3,000 will be available for individuals to gain skills or licences.
- The Local Government Loan Scheme is extended from $50 million to $150 million so local councils can upgrade infrastructure and provide employment.
- Small business Interest Free Loan Scheme has increased from $20 million to $50 million for businesses with turnover less than $10 million.
- A $40 million Small Business Grants Program with $20 million set aside for emergency grant support and $20 million for larger grant payment.
- Government leased property will get 6 months rent waiver.
- An additional $1.8 million provided for fisheries fees and licence relief for 12 months.
- Through the Business Continuity Program, businesses can receive up to $750 towards the cost of engaging the services of a suitably qualified person.
- Business Support Loan Scheme of $250,000 available to businesses to support continuity, viability and sustainability. These include purchases of plants and equipment, improving distribution channels, etc. Eligible businesses include hospitality, tourism and will be interest free for the first three years.
- Payroll tax liability for 6 months from April to September 2020. This is to ensure cash flow assistance to retain employees. No interest will be charged on the deferred amount.
- Automatic electricity rebates of $750 will be applied in the next electricity bills around June or July 2020 for small businesses where electricity usage is below 100 megawatts.
- Rideshare vehicle licence is waived for 12 months rideshare operators from 1 April 2020. If paid in advance, 12 months credit will be added to the licence at the next due date.
- Businesses affected will be eligible for a six-month waiver of payroll tax from Apri to September 2020.
- All ACT businesses with wages up to $10 million can defer their 2020-21 payroll tax, interest free until 1 July 2022.
- To facilitate cash flow to commercial property owners, commercial general rates notices for 2019-20 quarter 4 instalments are deferred by 4 weeks.
- Delivering a Jobs Rescue and Recovery plan to stimulate the economy and keep people in their jobs.
- A $30 million Home Improvement Scheme to fast track around 5,000 screwdriver ready projects in territory homes. This will ensure jobs, keep business open and cash flowing.
- Under the $20 million Business Improvement Grant, businesses will get access to $10,000 grants.
- The $50 million Small Business Survival Fund is targeted towards retail, hospitality, tourism and entertainment businesses. Eligible businesses can get two payments. The first is an immediate survival payment between $2,000 to $50,000 to offset the immediate cost pressures. The second is a rapid adoption payment between $1,000 to $5,000 so business can make recovery changes to adapt to the new operating environment.
- On 17 March 2020, the NT Government announced there will be hiring resident employee exemptions that have been extended to new hires up to 1 July 2021.
These grants are available to help businesses adapt and prepare to reopen:
The Victorian government is providing a $1.8 billion in tax and cashflow support by deferring payroll tax for businesses, 50% stamp duty discount for a commercial and industrial property for Regional Victoria, liquor license fee waiver, etc.
For more information, please visit their page on Business Resilience Package.
The Victoria announced a $1.7 billion Economic Survival Package in March 2020
Queensland
Western Australia
Western Australia announced a $607 million stimulus package announced to support households and small businesses.
South Australia
South Australia has announced that $1 billion will be injected to drive the economy and help secure jobs and support the industry during this pandemic.
Tasmania
ACT
Northern Territory
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