- The Victorian government has begun easing restrictions after more than 100 days of lockdown for Melbourne residents. Here’s what you need to know.
- The Federal Budget for the 2020 – 2021 year was announced on Tuesday 6 October and as expected there have been several updates. Please check the following link for our report on the Budget: Federal Budget 2020-2021
As the coronavirus pandemic forced the shutdown of large parts of Australia – and its economy – this year, the Federal Government was quick to step in with JobKeeper, Cashflow Boost and a host of other support for businesses.
Australia is now officially going through a recession. It’s the first time our country has been in a recession since 1991, with the economy shrinking 7 per cent from April to June thanks to Covid-19.
As a result, the government has been doing all they can to further stimulate the economy, support the population and our businesses.
In addition to measures like JobKeeper and Cashflow Boost, the Victorian Government recently announced a $3 billion support program to help businesses impacted by ongoing restrictions on 13 September 2020.
The program includes cash grants, cash flow support and tax relief, providing additional financial support to businesses impacted by restrictions in Victoria.
Please see below key highlights of the new $3 billion package announced.
– Grants up to $20,000 to Support Businesses through Restrictions
The third round of the Business Support Fund will provide up to $20,000 for business with a payroll of up to $10 million.
Eligible businesses will receive:
- $10,000 if its annual payroll is less than $650,000.
- $15,000 if its annual payroll is between $650,000 and $3 million.
- $20,000 if its payroll is between $3 million and $10 million.
A full list of the eligibility criteria will be published when the applications open on Friday, 18 September 2020. For more information, click here. For FAQs, click here.
– Sole Trader Support Fund
Grants of up to $3,000 to over 30,000 for eligible sole traders who operate from a commercial premises or location to which the sole operator is the tenant or licensee.
- Licensed Hospitality Business. Grants of up to $30,000 for licensed pubs, clubs, hotels, bars, restaurants and reception centres, based on their venue capacity and location. $5,000 grants for hospitality businesses to cover outdoor dining equipment, such as umbrellas, furniture and screens. For more information, click here.
- Business Chambers and Trader Groups. A competitive grants program to support metropolitan and regional business chambers and trader groups.
- Alpine businesses. Grants of up to $20,000 to help alpine businesses pay a service charge to Alpine Resort Management Boards.
- $20 million voucher program to assist sole traders and small businesses in building their digital capability.
- $15.7 million package to help Victorian exporters get their products to market and establish new trade channels.
- $8.5 million expansion to the ‘Click for Vic’ campaign to encourage more Victorians to support local businesses.
WAIVERS & DEFERRALS
- $1.7 billion in payroll tax deferrals (for businesses with payrolls up to $10 million) for the full 2020-21 financial year.
- $41 million to bring forward the 50% stamp duty discount for commercial and industrial property for all of Regional Victoria.
- $33 million to defer the planned increase in the landfill levy for six months.
- $30 million to waive 25% of the Congestion Levy this year, with the outstanding balance deferred.
- $27 million in liquor license fee waivers for 2021.
- $6 million to waive Vacant Residential Land Tax for vacancies in 2020.
Click on the link below for more information on the new $3 billion package announced for businesses:
Business Survival & Adaptation Package
WHAT YOU NEED TO KNOW ABOUT THE STIMULUS PACKAGE
In response to the economic impact of the Coronavirus, the Australian Government announced investment packages to support the economy.
The stimulus packages are focused on supporting wages and business investment, providing cash flow assistance, targeted support and household stimulus payments.
Here’s the key information you need to know.
CASH FLOW BOOST FOR EMPLOYERS
- 100% Cashback on PAYG Withholding, up to $100,000
- 50% subsidy on apprentice wages, up to $21,000
Instant asset write-off increased to $150,000 up to 31 December 2020 for new and second-hand assets. For eligibility criteria and application process, click here.
- Six Month Tax Deferrals
- Change in GST Reporting Cycle
- Variation to PAYG Instalment – possibly to zero
- Remission of penalties and interest
Under the $130 billion JobKeeper Payment scheme, businesses impacted by the Coronavirus 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 (before tax) per eligible employee from 30 March 2020, for a maximum period of 6 months.
Employers will need to pay eligible employees a minimum of $1,500 (before tax) per fortnight to claim the JobKeeper Payment. This will be paid to the employer in arrears each month by the Government. The first payments to eligible employers will commence in the first week of May 2020. JobKeeper Payments can be made for the period beginning 30 March 2020.
*JobKeeper has been extended to 2021
Below are the most important points you need to be aware of:
- JobKeeper extended to 3 January 2021.
- No changes to all existing payments until 28th September 2020.
- To continue to receive payments after September 28 you will need to be re-assessed and show 30% or more decline in GST Turnover in both June and September quarters 2020 relative to comparable 2019 periods (check the fact sheet for additional information).
JobKeeper rules and payments in 2020
From 28th September 2020 to the 3rd January 2021 Jobkeeper payments are:
- $1,200 per fortnight for all eligible employees who, in 4 weeks of pay periods before 1 March 2020, were working for 20 hours or more per week (business & NFP). This includes all business participants who were actively engaged in the business for 20 hours or more per week in February 2020.
- $750 per fortnight for eligible employees & business participants who worked less than 20 hours in the 4 weeks prior to 1 March 2020.
JobKeeper rules and payments in 2021
- You need to be re-assessed in January 2021 and show 30% or more decline in GST Turnover in each of the June, September and December quarters 2020 relative to comparable 2019 periods to be eligible to receive payments until March 2021.
- Payments from 4 January 2021 to 28 March 2021 will be paid at a lower rates:
- $1,000 per fortnight for all eligible employees who, in 4 weeks of pay periods before 1 March 2020, were working for 20 hours or more per week (business & NFP). This includes all business participants who were actively engaged in the business for 20 hours or more per week in February 2020.
- $650 per fortnight for eligible employees & business participants who worked less than 20 hours in the 4 weeks prior to 1 March 2020.
Please click the link for a handy infographic: Jobkeeper 2.0
Further details: Treasury Fact Sheet Jobkeeper 2.0
- Victoria: Payroll tax concessions, Liquor Licence fees waiver, rent assistance for commercial tenants in Government buildings, Land Tax payment deferral and Business Support Fund.
- New South Wales: Payroll tax concessions and Liquor Licence fees waiver.
- Western Australia: Payroll tax concessions, and a one-off grant of $17,500.
- Queensland: Interest-free loans up to $250,000 and Payroll tax concessions.
- Tasmania: Interest-free government loans for specific industries and Payroll tax concessions.
- Northern Territory: Home Improvement Scheme, Business Grants, Owners of residential and investment property grants.
- South Australia: A state stimulus package was announced – waiting on details.
Temporary 6 month increase to the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000 and an increase in the time companies have to respond from 21 days to 6 months. Directors also are provided with temporary relief from personal liability for trading while insolvent for 6 months.
- Access to working capital
Introduction of a Coronavirus SME guarantee scheme protecting financial institutions by guaranteeing 50% of new loans to SMEs – up to $250,000.
- Sole traders and self-employed eligible for JobSeeker and JobKeeper payments
The eligibility criteria to access income support relaxed for the self-employed and sole traders. More information about support available for sole traders can be found here.
- Temporary relief from some Corporations Act requirements
This includes temporary higher thresholds and more time to respond to demands from creditors and temporary relief from directors’ personal liability for trading while insolvent. More information is available here.
- Early release of superannuation up to $20,000 – conditions apply.
- Temporary reduction in minimum superannuation drawdown rates.
- Deeming rates reduced – lower rate: 0.25%, upper rate: 2.25%.
- Supplements increased, access extended and eased.
- Bankruptcy safety net.
BANKING AND LENDER INSTITUTIONS
Specific COVID-19 concessions have been announced by the following banks: CBA, Westpac, NAB, ANZ and Bendigo around loan repayments, hardship assistance, merchant fees and interest rates.
For more information about the stimulus package, read the following article – A small business guide to the economic stimulus package.
As new announcements are made by the Government and financial institutions, we will continue to keep you updated on developments.
If there is anything we can do to assist you in the meantime, please don’t hesitate to give us a call on 03 9079 0960 or email us at email@example.com.