Economic Measures for Business – COVID-19
♥ Updated 17 Apr 20 with JobKeeper Payment – Updated for Sole Traders, Trusts, Partnerships and Other Entities ♥
There is a lot of fear and uncertainty in the business community at this time. Things are changing rapidly, sometimes daily, and it can be hard to keep up with how to weather the storm.One of the biggest issues at this time is loss of revenue &/or issues with cashflow. We’ve prepared a list below of government and other measures that you may be able to access to help address this issue. We will keep updating this as new information is released.Also, please download the free Business Continuity Plan. This is a simple pdf checklist that outlines different steps you need to think about and action to keep your business alive during these difficult times.The free Business Continuity Plan covers seven areas – Cash, Asset Protection, Banks & Funding, Management Team, Employees, Customers & Suppliers and Mental Health.You need to not only be looking at strategies and seeking assistance to help you through the immediate challenges of the economic crisis to stay afloat but also looking at long term strategies to be able to take advantage of the increased consumer demand when this crisis eventually passes.If you feel lost and don’t know where to start or need help getting your accounts quickly up to date to take advantage of any financial or stimulus packages, please feel free to contact us or book in for a free 15 minute call with Elizabeth and we can talk to you about the best way forward. The harsh truth is that if you don’t have your accounts up to date you may not be able to access the support you need right now from the government, banks and other providers.Here is the current list of economic measures you may be able to access:
NB: This information has been sourced from Government websites and our industry association (ICB). This is not financial or accounting advice. This is an unprecedented, fast-changing situation and there are always further updates and uncertainty around some of the details. Please talk to your advisor, bookkeeper or accountant for clarity on your own situation.
A. General Economic Assistance & Resources:
1. Deferral of Business Loan Repayments
The Australian Banking Association has said that Australian banks will defer loan repayments (deferral of principal and interest repayments) for small businesses affected by COVID-19 for all term loans and retail loans for six months for small business customers with less than $3 million in total debt owed to credit providers.
Note that at the end of the deferral period businesses will not be required to pay the deferred interest in a lump sum. Either the term of the loan will be extended or the level of loan repayments will be increased.
If you want to take advantage of this measure, then you will need to talk to your bank directly.
2. Business Access to Funding
Under the Coronavirus SME Guarantee Scheme, the Federal Government will provide a 50% guarantee for unsecured loans to small and medium business with turnover under $50m to be used for working capital with a maximum loan of $250k for up to three years with the first six months having a repayment holiday. It is expected that those businesses who take up these loans would still be trading after the current economic crisis.
The government is also providing an exemption to responsible lending obligations for lenders providing credit to existing small business for 6 months and includes new credit, credit limit increases, credit variations and restructures.
More information on these measures is located here. Also, see further below.
The banks are rapidly finalising these products. If this is something you feel you would need for your business, then contact your bank directly.
3. Other Bank Measures for Business
Some banks have other measures in place such as waiving merchant terminal fees, reduction of interest rates and other options. Contact your bank for their specific options.
4. Personal Loans, Credit Cards & Mortgage Repayments
Different banks are offering different measures for those in financial difficulty. It is best to check your bank’s website to see what they offer and take it from there. The big four banks are indicating that they are willing to discuss payment pausing, with various conditions.
Once again, contact your bank for their specific options.
1. Fair Work Information
Depending on whether you are putting your employees on leave, reducing their usual hours, standing employees down, if they have mandatory isolation or various other scenarios, there are different measures that you need to take to deal with this.
Fair Work has a dedicated webpage with all of these types of scenarios and what action you need to take.
And here is Fair Work’s information about standing down employees.
2. Changes To Three Employment Awards
At this stage, three awards have had major changes predominately relating to flexibility during the coronavirus pandemic. They are:
- Restaurant Award
- Hospitality Award
- Clerks Award
3. Proposed new pandemic leave and flexible annual leave
On 1 April 2020, the Fair Work Commission issued a statement outlining its intention to update 103 awards during the coronavirus pandemic. The proposed updates would provide an entitlement to unpaid pandemic leave and also the flexibility to take annual leave at half pay.
Fair Work is yet to make a ruling on this and it has not yet changed any awards at this stage.
B. Government Economic Assistance:
NB: Although the governments have announced additional measures targeting other areas, we are only including those mainly relevant to small business, sole traders and employees.
Australian Taxation Office (ATO)
- Businesses can call the ATO’s Emergency Support Infoline (1800 806 218) to discuss relief options based on their needs and circumstances.
- Individuals and businesses can request a deferral of some payments (by up to 4 months) and vary instalments – this applies to BAS Payments including PAYG Instalments, Income Tax, Fringe Benefits Tax and excises taxes.
- Businesses under $20 million turnover can elect to report and pay their GST monthly instead of quarterly to accelerate access to GST refunds, but only from 1 April 2020, and must remain monthly for 12 months.
- Quarterly payers can vary their PAYG instalments for the March 2020 quarter and claim a refund of instalments paid for the Sep and Dec 2019 quarters.
- Businesses can request remittance of interest and penalties applied to tax liabilities incurred after 23 January 2020.
- Businesses can request a low-interest payment plan.
A very important note is that employers will still need to meet their ongoing super guarantee obligations for their employees as the ATO has no discretion under the SGC rules to vary the due date or waive the SGC where contributions are late or unpaid.
Businesses will also need to make sure they lodge their BAS on time. Just remember that as always, you don’t have to pay upon lodgement.
The Federal Government has now released multiple economic responses to the coronavirus impact. Although not specifically for business, some of the measures’ responses for individuals and households will be able to be accessed by sole traders who have been impacted who were not addressed in the first response, so we will include economic measures relating to business and households.
Please be aware that some of these measures are still subject to the passing of legislation and may still be subject to change or refinement.
1. JobKeeper Payment
NEW 17 Apr 20
The ATO has updated the details about the JobKeeper payment scheme with information for Sole Traders, Trusts, Partnerships and Other Entities.
Have a look at our new post that outlines what is known so far and what steps you may need to take.
2. Boosting cash flow for employers
- Eligibility – Small & Medium Size Business with an aggregated turnover of less than $50M per annum
- Enhances the 12 March 2020 measures – i.e. not additional but an enhancement
- Employers to receive a payment equal to 100% of their PAYG Withholding between now and June 2020 up to a maximum of $50,000
- Additionally – minimum payment is increased from $2,000 to $10,000
- PLUS – in the July – October 2020 period eligible entities will receive a ‘Boosting Cash Flow’ payment equal to what they received in the March – June 2020 payment
- This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments
- Payments to be tax-free and administered via the BAS system
- So, to summarise – the cashback is now calculated on 100% of PAYGW of your wages, paid in 2 separate calculation periods:
- 1 Jan 2020 – 30 June 2020 – 100% of PAYGW – Min of $10,000, Maximum of $50,000
- 1 July 2020 – 31 October 2020 – 100% of PAYGW – Min of $10,000, Maximum of $50,000
3. Temporary relief for financially distressed businesses – Bankruptcy Measures
- Safety net introduced to lessen the threat of actions that could unnecessarily push businesses into insolvency and force the winding up of the business.
- The threshold at which creditors can commence insolvency proceedings to increase from $2,000 to $20,000
- Temporary relief for directors from any personal liability for trading while insolvent and providing temporary flexibility in the Corporations Act 2001 to provide temporary and 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.
4. Increasing the instant asset write-off
- Instant asset write-off threshold increased from $30,000 to $150,000
- Access expanded to include businesses with an aggregated turnover of less than $500M
- Available until 30 June 2020
5. Backing business investment
- A time-limited 15-month investment incentive (through to 30 June 2021) which will operate to accelerate certain depreciation deductions.
- This measure will also be available to businesses with a turnover of less than $500 million, which will be able to immediately deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
- As announced, this measure is proposed to only apply to new depreciating assets first used, or installed ready for use, by 30 June 2021.
6. Supporting apprentices and trainees
- Wage subsidies to support the retention of apprentices and trainees – Employers with less than 20 full-time employees may be entitled to apply for Government funded wage subsidies amounting to 50% of an apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. The maximum subsidy for each apprentice/trainee is $21,000.
- Importantly, where an employer is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.
- It is proposed that employers will be able to register for the subsidy from early-April 2020.
7. Income support for individuals
- Time-limited supplement of $550 per fortnight to be paid to both existing and new recipients of JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit
- Expanded access
- Reduced means testing
- Reduced waiting times
8. Payments to support households
- Two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders.
- The first payment will be made from 31 March 2020 and the second payment will be made from 13 July 2020.
- Around half of those that benefit are for pensioners
9. Temporary early release of superannuation
- Aimed at Sole Traders
- Individuals affected by the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.
- Individuals will not need to pay tax on amounts released
- You can register your interest now by logging in to your myGov account and following the Intention to access coronavirus support instructions. If you don’t already have a myGov account, you can set one up by selecting ‘create an account’. You will be notified by email or SMS when applications open. You do not need to phone.
10. Temporarily reducing superannuation minimum drawdown rates
- Temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for 2019-20 and 2020-21
11. Supporting the Flow of Credit
- 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 – need to apply with your bank
- Temporary exemption from responsible lending obligations for lenders providing credit to existing small business customers.
1. New South Wales
- Waiver of payroll tax for businesses with payrolls of up to $10 million for three months (the rest of 2019-20). The discount will be automatically applied to your tax liability when you lodge your Annual Reconciliation.
- Bringing forward the next round of payroll tax cuts by raising the threshold limit to $1 million in 2020-21.
- Waiving a range of fees and charges for small businesses including bars, cafes, restaurants and tradies.
- NEW 03 Apr 20 Grants of $10k for small businesses. Eligibility includes have between 1-19 employees, turnover of more than $75k, payroll below $900k, ABN and employ staff at 01 Mar 20 and be highly impacted by COVID-19 restrictions. Further details.
- Established a Business Support Fund to assist small to medium businesses most impacted by the COVID-19 outbreak. Register interest at https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/business-support-fund
- Payroll Tax Refunds to small and medium-sized enterprises with a payroll of less than $3 million as a payroll tax refund with refunds to start next week. Applications are via SRO – https://www.sro.vic.gov.au/payroll-tax/covid-19-payroll-tax-relief-claim-reimbursement
- Landowners that have at least one non-residential property and total taxable landholdings below $1 million have the option of deferring their 2020 land tax payment until after 31 December 2020. The State Revenue Office will contact all taxpayers who are eligible for this deferral.
- Renewable liquor licence fees for 2020 will be waived Businesses that have already paid will be reimbursed.
- Working for Victoria Fund – displaced workers will be eligible to apply for different types of work. Register interest at https://www.vic.gov.au/workingforvictoria
- The Victorian Government will pay all outstanding supplier invoices within five business days.
- The Government will work directly with commercial tenants in government buildings who can apply for rent relief. Private landlords are also being encouraged to provide rent relief or holidays to help businesses.
- Jobs support loans – Loan facility including low-interest loans of up to $250,000 for carry on finance with an initial 12-month interest-free period for businesses to retain employees and maintain operations. Register your interest through the Queensland Rural and Industry Development Authority at http://www.qrida.qld.gov.au/current-programs/covid-19-business-support/queensland-covid19-jobs-support-scheme
- Payroll tax relief deferring paying payroll tax returns until 31 July 2020 and access immediate payroll tax refunds to eligible businesses. Apply at https://www.business.qld.gov.au/running-business/employing/payroll-tax/lodging/coronavirus-tax-relief
- Market diversification and resilience grants are available for Queensland agriculture, food and fishing exporters and their critical supply chain partners, as well as industry organisations working with exporters.
- Retraining and assistance package to assist workers who lose their job or income with retraining, job-matching and other help to transition into jobs in vital industries.
- Industry Support Package to assist large businesses to ensure they will be able to scale up and service the community when economic activity improves.
- Sole traders, small and medium businesses will get a $500 rebate on their power bill. Any business consuming less than 100,000-kilowatt hours will receive the rebate, which will be automatically applied on business electricity bills.
4. South Australia
- Business and Jobs Support Fund. A fund to support individual businesses and industry sectors directly affected by coronavirus.
- Payroll tax relief. Six month waiver for all businesses with an annual payroll up to $4m. Employers with grouped annual wages above $4m are able to defer for six months.
- Land tax relief. From July, those with outstanding quarterly bills for 2019-20 will be able to defer payments for 6 months. For 2020-21 Land Tax Transition Fund relief will be increased from 50% to 100%.
- Access to accrued leave for public sector workforce. If a public servant has a family member who has lost their job and moved onto Commonwealth benefits, they will be able to receive their accrued leave down to a limit of 2 retained weeks.
- Community and Jobs Fund. Supporting sporting, arts, recreational bodies, non-profit organisations and some other industry sectors facing potential collapse and the loss of jobs.
- Cost of living concessions. A once-off boost of $500 and bringing 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.
- Waiving of liquor licence fees for those businesses forced to close as a result of social distancing.
5. Western Australia
- $17,500 grants for small businesses with a payroll between $1 million and $4 million.
- The $1 million payroll tax threshold will be brought forward by six months to 1 July 2020.
- Businesses impacted by COVID-19 can apply now to defer payment of their 2019-20 payroll tax until 21 July 2020.
- Household fees and charges will be frozen until the next financial year — June 30, 2021.
- Interest-free loans to small businesses in the hospitality, tourism, seafood production, and exports sectors for businesses with a turnover of less than $5 million to purchase equipment or restructuring business operations and will be interest-free, for three years.
- Payroll tax liabilities will be waived for hospitality, tourism and seafood industry businesses for the last four months of 2019-20. Other businesses with payrolls of up to $5 million will be able to apply, based on the impact of the virus, to have their payroll tax waived for April to June 2020.
- The Tasmanian Government will pay bills sooner.
- Small Business Grants Program providing a $5,000 grant for businesses that hire an apprentice or trainee in the tourism, hospitality, building and construction, and manufacturing industries.
- Youth Employment Scheme providing a payroll tax rebate for one year, to businesses that employ a young person aged 24 and under, between April and December 2020
- Emergency Relief Package will be provided to organisations such as the Salvation Army, Red Cross and Rural Business Tasmania to support vulnerable Tasmanians who are self-isolated and help support households and workers impacted by the virus.
- Emergency Relief Payments for those in isolation– One-off payments of $250 for individuals or up to $1,000 for families, for those who are required by Public Health to self-isolate as a result of the coronavirus. Eligibility includes those with a Health Care Card or a Pensioners Concession Card and those on low incomes who can demonstrate a need for financial support, including casual workers.
- Accommodation Support – $1 million emergency accommodation support will be available for individuals and families who have been placed on home quarantine but who are unable to return to their regular place of residence. This will provide additional support for our communities at this difficult time
7. Australian Capital Territory
- Licenced venues will receive a 12-month waiver of their food business registration and on-licence liquor licencing fees from 1 April 2020 and outdoor dining fees for 2020-2021 will be waived.
- Clubs Diversification Fund to support clubs to keep staff employed at the award rate.
- Small business owners with electricity usage below 100 megawatts per year will see rebates of $750 automatically applied to their next electricity bill in around June or July 2020.
- The Rideshare vehicle licence fee will be waived for 12 months for rideshare operators from 1 April 2020 as part of the normal licencing processes.
- Hospitality, creative arts and entertainment industries will receive a one-off, six-month waiver of payroll tax from April to September 2020. All ACT businesses with Group Australia-wide wages of up to $10 million can defer their 2020-21 payroll tax, interest-free until 1 July 2022. Online application form at ACT Revenue Office.
- Commercial property owners with an Average Unimproved Value below $2 million on their property are eligible for a rebate on their commercial rates fixed charge. Commercial ratepayers will receive a credit of $2,622 (equivalent to the annual fixed charge) to their 2019-20 general rates, in quarter four. This will be applied automatically.
8. Northern Territory
- Business Improvement Grant. All Territory businesses will be able to access a $10,000 grant, followed by an additional $10,000 grant if they contribute $10,000 of their own.
- Immediate Work Grants of up to $100,000 will be given to not-for-profit and community organisations to engage local businesses to do repairs, renovations and upgrades to their property and facilities.
- Small Business Survival Fund is specifically targeted at supporting industries such as retail, hospitality, tourism and entertainment businesses.
- Structural adjustment package will provide direct support for cafes, restaurants and other venues who serve the public. The program will help businesses to install partitioning to meet the new requirements for gatherings of less than 100 people indoors and to help develop online ways of doing business.
- All regular increases to government fees and charges, including electricity costs, will be put on hold. This means that fees and charges which are normally increased annually or regularly will not be.
- The payroll tax exemption for hiring Territory employees has been extended to 30 June 2021. For more information on eligibility for employers, go to the Department of Treasury and Finance website.
C. Other Resources:
Let Us Help You! ♥
1. Get Your Free Business Continuity Plan
This is a simple pdf checklist that outlines different steps you need to think about and action to keep your business alive during these difficult times. Download it here.
2. Get Some Help
If you feel lost and don’t know where to start or need help getting your accounts quickly up to date to take advantage of any financial or stimulus packages, please feel free to contact us or book in for a free 15 minute call with Elizabeth and we can talk to you about the best way forward.
1. Black Dog Institute – Coronavirus: Resources for anxiety, stress & wellbeing
2. Beyond Blue Support Services
5. Suicide Callback Service
6. Men’s Line Australia
7. National Debt Helpline
Agencies & Organisations
1. Business.gov.au – Coronavirus information and support for business
2. Fair Trading – Coronavirus (COVID-19) FAQs on consumer and business rights
Don’t forget to download your Free Business Continuity Plan…..