A Brief Outline of Australian and State Government Small Business Coronavirus Packages
Teece Hodgson & Ward 3 April 2020
FEDERAL GOVERNMENT [i]
New JobKeeper Payment (announced 30 March)
Businesses impacted by the coronavirus (their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month)) will be able to access a subsidy from the Government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of six months. This includes eligible employees that have been stood down or re-hired. Businesses without employees that meet turnover tests, such as the self-employed, can also register their interest in applying for the JobKeeper Payment.
JobKeeper Payment fact sheet:
JobKeeper Payment: key questions answered: https://www.smallbusiness.wa.gov.au/blog/jobkeeper-payment-key-questions-answered
Additional payments for employers to retain staff (announced 22 March)
Not-for-profits and small businesses with a turnover under $50 million will receive a tax-free cash payment of from $20,000 up to $100,000 to help them retain staff and continue operating.
Eligible entities will receive an additional payment equal to the total of all of the ‘boosting cash flow for employers’ payments received.
The Government expects 690,000 businesses employing 7.8 million people and 30,000 not-for-profits will be eligible for measures in the stimulus package. The payments are tax free, there will be no new forms and payments will flow automatically through the ATO.
Who is eligible? Small and medium business entities with aggregated annual turnover of less than $50 million and that employ workers are eligible.
When will it be received? The payment will be available from 28 April 2020. An additional payment is also being made from 28 July 2020.
Bank Loan Extensions
Sole Traders: Expanded eligibility for JobSeeker Payment for sole traders (announced 30 March)
Eligible sole traders will be granted access to the JobSeeker Payment, which now includes an additional coronavirus supplement of $550 per fortnight for the next six months. Available to sole traders that meet the JobSeeker Payment income test.
Sole Traders: https://treasury.gov.au/coronavirus/households
The standard waiting periods and asset tests will be waived to allow quicker access to these payments. Individuals will still be able to keep operating their businesses and earn up to $1,075 per fortnight before their payments are affected. On 30 March, it was announced that the income test for partners of job seekers will be increased from $48,000 to $79,762 to provide greater access.
Who is eligible? Sole traders that meet the JobSeeker Payment income test.
When will it be received? After your application has been approved via the Services Australia website: https://www.servicesaustralia.gov.au/
Increase in the instant asset write-off threshold (announced 12 March)
The instant asset write-off threshold will be increased from $30,000 to $150,000. The higher threshold is in place from 12 March until 30 June 2020 and applies to new or second-hand assets installed in businesses during these dates.
Who is eligible? Businesses with aggregated annual turnover of less than $500 million (up from $50 million).
When will it be received? The instant asset write-off is generally claimed back via your business tax return. At this stage, no specific details have been announced on how to access this incentive. We will update this information when more details are announced by the federal government.
Accelerated depreciation for investments (announced 12 March)
Businesses will be able to deduct an additional 50 per cent of an asset cost in the year of purchase from 12 March 2020 until 30 June 2021. This is designed to support business investment and economic growth over the short term.
Who is eligible? Businesses with a turnover of less than $500 million that are purchasing new depreciable assets. Eligible assets covered are new assets that can be depreciated under Division 40 of the Income Tax Assessment Act 1997. Note: Second hand assets are not eligible for this initiative.
When will it be received? Depreciation is generally claimed back via your business tax return. At this stage, no specific details have been announced on how to access this incentive earlier. We will update this information when more details are announced by the federal government.
Cash flow payment for employers (announced 12 March, increased 22 March)
Eligible small businesses that withhold income tax from employee salaries and wages and pay it to the Australian Taxation Office can receive a payment equal to 100 per cent of the amount withheld, up to a maximum payment of $50,000. A minimum payment of $10,000 may be available to businesses that pay wages but are not required to pay tax.
Who is eligible? Businesses with a turnover of less than $50 million that employ staff between 1 January 2020 and 30 June 2020.
When will it be received? Eligible businesses will automatically receive payments of up to 100 per cent of the amount withheld via their business activity statements (BAS) or instalment activity statement (for PAYG) from 28 April 2020, with refunds to be paid within 14 days after that date.
Greater leniency for insolvency and bankruptcy (announced 22 March)
The threshold at which a creditor can take action against a small business has increased from $2,000 to $20,000. The mandatory response time has also increased from 21 days to 6 months. Temporary relief for directors from any personal liability for trading while insolvent has also been announced.
Who is eligible? All small businesses facing insolvency or bankruptcy as a result of the coronavirus.
When will it be received? N/A
Moratorium on evictions (announced 29 March)
On 29 March 2020, the National Cabinet agreed to a temporary moratorium on evictions over the next six months for commercial and residential tenancies in financial distress who are unable to meet their commitments due to the impact of coronavirus.
Commercial tenants, landlords and financial institutions are encouraged to sit down together to find a way through to ensure that businesses can survive and be there on the other side.
In addition, the Australian Banking Association announced an extension of Australian banks loan repayment deferral scheme, to make it available to commercial landlords with loans up to $10M who undertake not to evict or terminate the lease of their tenants.
Early access to superannuation (updated 22 March)
The Government is also allowing sole traders who have seen their hours of work or income fall by 20 per cent or more as a result of the pandemic to access their superannuation. This is capped at $10,000 this financial year and a further $10,000 next financial year. The withdrawals will be tax free.
Who is eligible? Individuals whose income has fallen by 20 per cent or more.
When will it be received? On successful application via the myGov website when applications open in April 2020. https://my.gov.au/
The payment will be available from 28 April 2020. An additional payment is also being made from 28 July 2020.
Wage subsidy for apprentices and trainees (announced 12 March)
Eligible employers can apply for a wage subsidy of 50 per cent of an apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Businesses can be reimbursed up to a maximum of $21,000 per eligible apprentice, (which is $7,000 per quarter for the first three quarters of 2020).
Who is eligible? Small businesses with fewer than 20 full time employees who retain an apprentice or trainee. The apprentice must have been in training with the small business as at 1 March 2020.
When will it be received? You will be able to register for the subsidy from early April 2020. For more information on how to apply, including eligibility criteria, contact an Australian Apprenticeship Support Network (AASN) provider. Please note: Claims for this subsidy must be lodged by 31 December 2020.
SME Guarantee Scheme (updated 22 March)
The Government will provide a guarantee of 50 per cent to small and medium enterprise (SME) lenders for new unsecured loans to be used for working capital for small to medium businesses, to enable them to access additional funding to help support them through the upcoming months. Businesses with a turnover of up to $50 million will be eligible to receive these loans, up to $250,000 per borrower. The loans will be up to three years, with an initial six month repayment holiday and will be in the form of unsecured finance.
Who is eligible? Businesses with a turnover of up to $50 million that pass the lenders’ credit assessment processes.
When will it be received? The scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.
Businesses with a turnover of up to $50 million that pass the lenders’ credit assessment processes.
When will it be received? The scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.
A number of other measures designed to support households and boost the economy are also included in the package:
Two tax-free $750 stimulus payments to individual income support recipients and eligible concession card holders. The first payment will be rolled out from 31 March 2020 and the second from 13 July 2020.
Targeted regional and community support aimed at businesses and communities particularly affected by the economic downturn due to coronavirus, for example those in the tourism, agriculture and education industries. This support will include waiving fees and charges for tourism businesses operating in national parks, plus assistance in identifying new export markets and supply chains.
The Australian Tax Office (ATO) will also consider relief for certain tax obligations to eligible businesses, including deferring tax payments up to four months. If disruption to your business operations causes you to fall behind with your tax and super obligations, read the ATO’s information on COVID-19: https://www.ato.gov.au/Individuals/Dealing-with-disasters/In-detail/Specific-disasters/COVID-19/ or call them on 1800 806 218 or speak to your tax professional so that they can work with you to find a solution.
Banking relief announcement
The Australian Banking Association has announced new loan deferral arrangements for small businesses affected by coronavirus. For assistance from your bank for other financial obligations: https://www.smallbusiness.wa.gov.au/blog/new-banking-relief-announcement
Contact their hardship numbers: https://www.ausbanking.org.au/campaigns/financial-hardship/
For more information, see Treasury website: https://treasury.gov.au/coronavirus/businesses
STATE AND TERRITORY
This information has been published by various State Governments, as at 3 April 2020. We recommend you visit their website for more details and updates
NSW Coronavirus Relief Package (Announced 3 April 2020)
Grants of up to $10,000, “designed to provide help fast and would benefit tens of thousands of businesses across NSW”
Who is eligible? Businesses meeting the following criteria:
- between 1-19 employees and a turnover of more than $75,000;
- payroll below the NSW Government 2019-20 payroll tax threshold of $900,000;
- have an Australian Business Number as at 1 March 2020;
- based in NSW and employ staff as at 1 March 2020;
- highly impacted by the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 issued on 30 March 2020;
- Use the funding for unavoidable business costs such as utilities, overheads, legal costs and financial advice;
- Provide appropriate documentation upon application.
Applications for a small business grant of up to $10,000 will be available through Service NSW within a fortnight and remain open until 1 June 2020.
When will it be received? After confirmation of successful application.
Queensland Coronavirus Relief Package (as at 3 April 2020)
Payroll tax relief
A range of payroll tax relief measures as a result of the impacts of coronavirus (COVID-19) including:
- refunds of payroll tax for 2 months (average nearly $9,000)
- a payroll tax holiday for 3 months (average $13,600)
- deferral of paying payroll tax for the 2020 calendar year. If you have already applied for a deferral, you do not need to re-apply – it will be extended.
Who is eligible? An employer (or part of a group of employers) who pays $6.5 million or less in Australian taxable wages. As part of this relief package, the refund and payroll tax holiday do not have to be repaid.
For large employers: An employer (or part of a group of employers) who pays more than $6.5 million in Australian taxable wages and have been negatively affected (directly or indirectly) by coronavirus:
- deferral of payroll tax for the 2020 calendar year (If you have already applied for a deferral, you do not need to reapply – it will be extended.)
- refund of your payroll tax for 2 months (January and February 2020).
Queensland also offers a range of other relief including energy bill rebates.
Worker retraining assistance
Up to $500 million will be spent 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. See the Queensland Government website for more information: https://www.qld.gov.au/about/industry-recovery
Job Support Loan
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. The concessional loan facility comprises low interest loans of up to $250,000 for carry on finance with an initial 12-month interest free period for businesses to retain staff. Any eligible business can apply for a loan.
Other support packages for small business
Victoria Coronavirus Relief Package (as at 3 April 2020)
As part of a $1.7 billion economic survival package, the Victorian Government has announced $500 million to establish a Business Support Fund to assist small to medium businesses most impacted by the COVID-19 outbreak working with the Victorian Chamber, Australian Hotels Association and Ai Group to administer the fund to help businesses survive and keep people in work.
The fund is targeted at small businesses that may not be eligible for 2019-20 refunds and waiving of payroll tax, which applies to businesses with wages bills of $650,000 or above.
Businesses with a wages bill between $650,000 and $3 million will have their payroll tax refunded and waived for the 2019-20 financial year under the Victorian Government’s $1.7 billion economic survival package.
Note: Applications open on Monday 30 March 2020 and close on Monday 1 June 2020.
The small business package includes:
- A $10,000 per business, to be allocated through a grant process
Who is eligible? Businesses meeting the following requirements:
- Have been subject to closure or highly impacted by Non-Essential Activity Directions issued by the Deputy Chief Health Officer to-date; and
- Employ people; and
- Have a turnover of more than $75,000; and
- Have payroll of less than $650,000; and
- Hold an Australian Business Number (ABN) and held that ABN at 16 March 2020 (when the State of Emergency External link (opens in same window)was declared); and
- Have been engaged in carrying out the operation of the business in the Australian State of Victoria on 16 March 2020.
Business need to prove annual turnover of more than $75,000 by providing BAS as lodged with ATO
For more information:
https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/business-support-fund and https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/business-support-fund/business-support-fund-faqs
Western Australia Coronavirus Relief Package (as at 31 March 2020)
The Western Australian Government has announced measures to support small business during the coronavirus (COVID-19) pandemic.
The small business relief include:
- $17,500 grants for small businesses with a payroll between $1 million and $4 million.
- The $1 million payroll tax threshold (announced in October 2019) will be brought forward by six months to 1 July 2020.
- The WA Government will waive rental payments for small businesses and not-for-profit groups in State Government-owned buildings for 6 months.
- A one-off $2,500 credit on electricity bills for small businesses that consume less than 50MWh per annum. Power and water disconnections will not occur and interest will not be charged on deferred payments until 30 September for small businesses facing financial difficulty due to COVID-19. Please Note: These credits and concession apply to Synergy and Horizon Power customers.
- Payroll tax will be waived for 4 months for businesses with annual wages under $7.5 million (NB: this replaces the previous payroll deferral measure which was announced).
- Affected businesses can apply for interest free payment arrangements and for late payment penalties to be waved 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, which will be waived and refunds given to businesses that have already paid.
In addition the Western Australian Government announced $114 million in measures to support small business during the coronavirus (COVID-19) pandemic.
For more information: https://www.smallbusiness.wa.gov.au/blog/wa-coronavirus-relief-package
South Australia Stimulus Package (announced 26 March 2020)
Part of an emergency $650m Jobs Rescue Package – which brings the state’s total economic response to $1 billion – includes the establishment of two new funds (the $300m Business and Jobs Support Fund and the $250m Community and Jobs Support Fund).
- Business and Jobs Support Fund will be used to directly assist individual businesses and industry sectors facing potential collapse and the loss of thousands of jobs
- Once off boost of $500 and bring forward the 2020-21 ‘Cost of Living Concession’ for households who are receiving the Centrelink JobSeeker Payment, assisting those who are unemployed or lose their jobs as a result of the coronavirus restrictions. For eligible homeowners, their 2020-21 payment of $215.10 will now become $715.10. Eligible tenants will receive $607.60
- Payroll Tax Relief – up to $60 million of savings to business:
- 6-month waiver for all businesses with an annual payroll (grouped) up to $4 million
- Eligible businesses won’t have to pay any payroll tax from April to September
- Employers with grouped annual wages above $4 million able to defer payroll tax payments for 6 months on demonstration of significant impacts on cash flow of coronavirus
- Land Tax Relief – individuals and businesses with outstanding quarterly bills for 2019-20 Land Tax able to defer payments for 6 months. For 2020-21 Land Tax Transition Fund relief will be increased from 50% to 100% based on existing relief criteria guidelines.
Tasmania Stimulus Package (announced 26 March 2020)
The Tasmanian Government package includes:
- $20 million in interest free loans to small businesses in the hospitality, tourism, seafood production, and exports sectors. The loans will be available to businesses with a turnover of less than $5 million to purchase equipment or restructuring business operations and will be interest free, for three years.
- $20 million in interest free loans to small
- Businesses in the hospitality, tourism, seafood production, and exports sectors. The loans will be available to businesses with a turnover of less than $5 million to purchase equipment or restructuring business operations and will be interest free, for three years.
- The targeted Small Business Grants Program provides a $5,000 grant for businesses that hire an apprentice or trainee in the tourism, hospitality, building and construction, and manufacturing industries. Funding for this measure has been brought forward.
- Interest Free Loans for Local Government – $50 million in interest free loans over three years will be made available to encourage Local Government to upgrade, renovate and to do necessary maintenance to improve tourism and other assets.
- $100,000 will be provided to the Tourism Institute Council Tasmanian and the Tasmanian Hospitality Association for training in the tourism and hospitality sectors over the winter months, to improve productivity and to be ready to bounce back when tourism returns to normal levels
For more information: http://www.premier.tas.gov.au/documents/FACT_SHEETS_-_STIMULUS_PACKAGES_Final-V2.0.pdf
Australian Capital Territory
The ACT Government announced a $137m package which includes:
- Supporting clubs and Canberra Casino: An additional payment of $1.5 million will be made available, as well as the existing $1.8 million in the Diversification and Sustainability Support Fund being freed up to keep staff employed. A total of $3.3m is available for distribution to clubs.
- Payroll Tax deferral – ACT businesses with Australia-wide wages of up to $10 million can defer their 2020-21 payroll tax, interest free until 1 July 2022. Businesses whose operations are directly affected by the ‘prohibited activities list’ such as gyms and indoor sporting venues, cinemas, beauty therapists and nail salons will be eligible to receive a six-month waiver of payroll tax from April to September 2020.
- Businesses in the construction industry can defer their payroll tax liability for the six months from April to September 2020.
- Waiving a variety of business fees from 1 April 2020 for businesses that require an infection control licences.
- Small business owners with electricity usage below 100 megawatts per year will see rebates of $750 automatically applied to their next electricity bill in June/July
- Deferring issuing commercial general rates notices for 2019-20 quarter 4 instalments by four weeks
- Increasing subsidies for apprenticeships and traineeships and other VET students
- Commercial Tenancy relief through deferred or waived rates and review of commercial rents in ACT Government owned properties which have been significantly affected by Covid-19 – commercial tenants that can demonstrate this may receive rental relief for up to six-months from 1 April 2020
Northern Territory (announced 24 March 2020)
The Northern Territory Government announced a $65 million Jobs Rescue and Recovery plan, and an additional $50 million fund to support small business to help stimulate the economy and keep Territory.
The Territory package includes:
- Home Improvement Scheme – $30 million to save local jobs, keep businesses open and cash flowing
- Business Improvement Grant – $20 million. All Territory businesses will be able to access a $10,000 grant. For work valued at more than $10,000, the co-contribution by the Territory Government is limited to $10,000 on a dollar-for-dollar basis up to a maximum grant of $20,000
- Immediate Work Grant – $5 million. Grants of up to $100,000 will help not-for-profit and community organisations to engage local businesses to do repairs, renovations and upgrades to their property and facilities. Registrations for businesses to provide services opened 30 March 2020. Grant applications open 20 April 2020
- Small Business Survival Fund – $50 million specifically targeted at supporting industries such as retail, hospitality, tourism and entertainment businesses. Eligible Territory businesses with an ABN and which usually operate in one of the industry sectors affected by the social gathering restrictions announced on 22 March 2020 and 24 March 2020, and / or have been significantly impacted by the physical distancing requirements in response to the coronavirus (COVID-19) pandemic – for example, staffing, turnover, will be able to apply for two payments:
- an immediate survival payment of between $2,000 and $50,000 to help offset the immediate cost pressures on businesses
- a rapid adaption payment of between $1,000 and $5,000 to help businesses make the necessary changes they need to help adapt to the new operating environment.
For more information:
Last updated 03 April 2020. Disclaimer: The information above has been sourced from the Government websites. We accept no responsibility for the accuracy or correctness of this information. Readers should visit the Federal and State websites which set out the Government responses and programs in more detail. Links to some of these websites (as at the date of this paper) are included above. Readers should check those websites to see if anything has changed, as Governments are constantly amending their positions as events occur.
[i] Federal Government information was published by the Small Business Development Corporation, Western Australian Government, on 30 March 2020. We recommend the Federal, State and Territory websites noted in this paper. Western Australian Government website: https://www.smallbusiness.wa.gov.au/blog/coronavirus-stimulus-package-small-business