There has been significant announcements over the last 72 hours; with the Government to inject a total amount of $189 billion into the economy; and follows the $17.6 billion first economic stimulus package, $90 billion from the RBA and $15 billion from the Government to make access to finance easier.
Prime Minister Scott Morrison has said, “We want to help businesses keep going as best they can and for as long as they can, or to pause instead of winding up their business. We want to ensure that when this crisis has passed Australian businesses can bounce back”.
Below we have outlined the key announcements to date that have been put forward by the Federal Government, ATO and the State Government; and how this applies to Small Medium business.
Boosting cash flow for employers
- Eligible Small Medium Enterprises (SMEs) can now apply for up to $100,000 to employ people, with a minimum payment of $20,000.
- Under the enhanced scheme from the first package, employers will receive a payment equal to 100 per cent of their salary and wages withheld (as opposed to 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. The payment will be available from 28 April 2020.
The payments are tax free and will flow automatically through the ATO.
Please click here for Boosting cash flow for employers
Supporting the flow of credit
- A Coronavirus SME Guarantee Scheme will also be established under which the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs. This comes in conjunction with last week’s announcement form the Reserve Bank of Australia of a $90 billion term funding facility intended to reduce the cost of lending.
- The Government will guarantee up to $20 billion to support $40 billion in SME loans.
- In addition to the Australian Government’s SME Guarantee Scheme Commonwealth Bank will make available up to $10 billion of additional unsecured credit to support SMEs.
- The measure will mean SMEs can access an unsecured business loan through the Commonwealth Bank for three years of up to $250,000 at historically low rates.
Please click here for Supporting the flow of credit
Australian Tax Office
The ATO is currently offering the following options to assist businesses impacted by COVID-19:
- 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.
The ATO does note that employers will still need to meet their ongoing super guarantee obligations for their employees. For more information on the ATO support measures
Queensland State Government
The Palaszczuk government has announced:
$500 million loan facility
- A new Jobs Support $500 million loan facility, interest free for the first 12 months, has been created to support businesses to keep Queenslanders in work and will comprise loans of up to $250,000. More information here $500 million loan facility.
Payroll tax deferment
- All Queensland businesses impacted by the coronavirus outbreak can defer lodging and paying payroll tax until 31 July 2020. More information here The payroll tax relief package for Queensland businesses.
$27.25 million coronavirus industry recovery package
- This package will assist local government, business and industry with resilience and recovery strategies. It includes targeted financial support and advice, promotion for Queensland, and counselling and support. More information here $27.25m package to provide immediate assistance.
New South Wales State Government
Premier Gladys Berejiklian has announced the NSW Government’s package:
- $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
- $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.
Please click here for NSW economic stimulus information
Whilst these announcements are positive in the current state of play; the details of how and when such payments will be released is largely yet to come. We are monitoring this very closely and will communicate this as soon as available.
In the meantime please click here for Coronavirus information and support for business