There have been a flurry of announcements, unveilings and media statements released in the past few weeks in regards to the various state and federal government support programs for COVID-19.
With so much information to filter through, it can be hard to keep up with what our governments are doing to help support business in these uncertain times.
NIBA is committed to supporting members through the coronavirus outbreak and the uncharted territory that lies on the other side. To help navigate the various stimulus packages, NIBA has put together this helpful guide of federal and state initiatives to support small and medium businesses around Australia.
National Cabinet Roadmap
The Federal government has released a roadmap for easing coronavirus restrictions. The three-phase plan paints a picture for life in Australia over the next few months. The restrictions will be lifted gradually, with each state deciding which restrictions to lift and when to move to the next phase.
There is a lot of misinformation surrounding what people and businesses can and cannot do under the new restrictions as states move through the roadmap separate to each other. It is important for businesses to ensure that they are following all relevant state health directives for the safety of their staff, clients and the broader community.
With states beginning to wind back restrictions we’re all wondering when we can return to work and what will workplaces look like post coronavirus. Although the government is yet to set a date, the National cabinet has agreed to a set of Covid-19 safe workplace principles while Safe Work Australia is providing industry specific information for employers and employees on their website. The Safe Work Australia website contains a variety of resources for businesses including advice on social distancing, hygiene practices and coronavirus-related workplace compensation.
Businesses are being encouraged to prepare for re-opening by having a solid covid-safe work plan in place to protect employees and customers. Recommended measures include; staggering start and finish times to avoid crowding on public transport, frequent cleaning of all work spaces, avoiding face-to-face meetings and undertaking a risk assessment before recommencing operations. The Safe Work Australia website should be businesses main source of information when developing these plans.
Federal
JobKeeper factsheet for employers
Under the JobKeeper Payment, businesses or not-for-profits 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 payment of $1,500 per fortnight per eligible employee from 30 March 2020 until
27 September 2020. You can find the complete factsheet here.
SME Guarantee Scheme
The Government will establish the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SMEs) to gain access to working capital to help them get through the impact of the coronavirus.
Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs. The Government’s support will enhance lenders’ willingness and ability to provide credit to SMEs with the Scheme able to support $40 billion of lending to SMEs.
The Scheme will complement the announcement made by Australian banks to support SMEs by deferring loan repayments of affected small business for 6 months. This scheme will also complement measures taken by the Reserve Bank to increase the banking sectors appetite to provide loans to SMEs.
For more information click here.
Boosting Cashflow for Employers
The Federal Government is providing up to $100,000 to eligible small and medium sized businesses, and not-for-profits (including charities) that employ people. Eligible employers will receive a payment equal to 100 per cent of their salary and wages withheld up to a maximum of $50,000 with a minimum payment of $10, 000.
Small and medium business entities with aggregated annual turnover under $50 million that employ workers are eligible. NFPs entities, including charities, with aggregated annual turnover under $50 million and that employ workers will also be eligible.
The payment will be available from 28 April 2020. The payments are tax free and will flow automatically through the ATO.
An additional payment will also be made for the period of June- September. Eligible entities will receive an additional payment equal to the total of the Boosting Cash Flow for Employers payments received.
For more information click here.
Increased Instant Asset Write-off
The threshold for instant asset write off for businesses with an annual aggregated turnover of less than $500 million has been increased from $30,000 to $150,000. The threshold will apply to assets that are either installed or ready for first use by 30 June 2020.
Businesses with a turnover of $500 million or more are not eligible to use instant asset write-off. From 1 July 2020, the instant asset write-off will only be available for small businesses with a turnover of less than $10 million and the threshold will be $1,000.
For more information click here.
Backing Business Investment (BBI)
Measures introduced in March 2020 will provide an incentive to businesses with an aggregated turnover of less than $500 million for the 2019–20 and 2020–21 income years, to deduct the cost of depreciating assets at an accelerated rate.
For each new asset, the accelerated depreciation deduction applies in the income year that the asset is first used or installed ready for use for a taxable purpose. The usual depreciating asset arrangements apply in the subsequent income years that the asset is held.
To be eligible to apply the accelerated rate of deduction, the depreciating asset must:
• not be an asset to which an entity has applied depreciation deductions or the instant asset write-off rules
• be first held on or after 12 March 2020
• first used or first installed ready for use for a taxable purpose on or after 12 March 2020 until 30 June 2021
Under the measures, different rules apply depending on whether or not an entity is using the simplified rules for capital allowances for small businesses.
For more information click here.
Assistance to help retain apprentices and trainees
Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020.
The subsidy will be available to small business employing fewer than 20 fulltime employees who retain an apprentice or trainee. Or employers of any size and Group Training Organisations that reengage an eligible out of trade apprentice or trainee. The apprentice or trainee must have been in training with a small business as at 1 March 2020.
Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee. Employers can register for the subsidy from 2 April 2020. Final claims for payment must be lodged by 31 December 2020.
JobKeeper wage subsidies
Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a subsidy from the Government to assist in paying employee wages. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee for a maximum period of 6 months.
Employers will be eligible for the subsidy if:
• Their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent; or
• Their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent; and
• The business is not subject to the Major Bank Levy
Not-for-profit entities, charities and sole traders that meet the turnover tests are eligible to apply for JobKeeper Payments
For more information click here.
Not-for-profit entities, charities and sole traders that meet the turnover tests are eligible to apply for JobKeeper Payments although the eligibility criteria for some charities may differ.
For more information click here.
Rent Relief Code of Conduct
The National cabinet has agreed that all State and Federal governments will implement a set of good faith leasing principles for application to commercial tenancies (including retail, office and industrial) between owners/operators/other landlords and tenants, in circumstances where the tenant is a small-medium sized business (annual turnover of up to $50 million) and is an eligible business for the purpose of the Commonwealth Government’s JobKeeper programme.
These principles will apply to negotiating amendments in good faith to existing leasing arrangements – to aid the management of cashflow for SME tenants and landlords on a proportionate basis – as a result of the impact and commercial disruption caused by the economic impacts of industry and government responses to the declared Coronavirus (“COVID-19”) pandemic.
National Cabinet has agreed that there would be a proportionality to rent reductions based on the tenant’s decline in turnover to ensure that the burden is shared between landlords and tenants. The Code provides a proportionate and measured burden share between the two parties while still allowing tenants and landlords to agree to tailored, bespoke and appropriate temporary arrangements that take account of their particular circumstances.
The Rent Relief Policy will include a mutual obligation requirement on the small and medium sized enterprises and not-for-profit tenants to continue to engage their employees through the JobKeeper initiative where eligible, and if applicable, provide rent relief to their subtenants. How this code is regulated will be determined by the state.
New South Wales
Payroll tax waiver & Deferral
The NSW State government has announced it will waive payroll taxes for businesses whose total grouped Australian wages for the 2019/20 financial year are less than $10 million.
Eligible businesses who lodge an pay annually will have their tax liability reduced by 25 per cent, while those who lodge monthly will not be required to pay for the remainder of the 2019-20 financial year. The government also announced they would bring forward the scheduled payroll tax cuts by raising payroll tax threshold to $1 million in 2020-21.
Businesses with payrolls over $10 million will be able to defer their payroll tax payments for six months. Businesses with payrolls of $10 million or less will also receive a three month deferral in addition to the three month waiver.
For more information click here.
NSW Rental Relief
The NSW government has announced a number of measures in-line with their national cabinet commitments on rental relief. The measures will apply to residential tenants who have had a 25 per cent reduction on income after tax and commercial tenants who have had a 30 per cent reduction in revenue as a result of COVID-19. The measures include;
- An interim 60-day stop on landlords issuing termination notices or applying for NSW Civil and Administrative Tribunal eviction orders due to rental arrears, where tenants are financially disadvantaged by COVID-19.
- A 6-month moratorium on rental arrears eviction for those financially impacted by COVID-19
- Landlords will be required to negotiate new rental arrangements with the tenant in good faith and can only seek to issue a termination notice of apply for an eviction after the 60-day period has elapsed.
- Commercial landlords will be offered a concession of up to 25% of their 2020 land tax liability if they pass the savings on through a rent reduction.
- Commercial landlords will not be able to terminate a lease due to unpaid rent, and must offer tenants rent relief proportionate to the tenant’s decline in turnover.
Victoria
The Victorian government has announced a number of measures in-line with their national cabinet commitments on rental relief. These measures include;
- Commercial and residential landlords will be offered a concession of up to 25 per cent of their 2020 land tax liability if they pass the savings on in the form of a rent reduction.
- A six-month moratorium on evictions for non-payment of rent for commercial tenancies involving small and medium sized businesses.
- A 6-month ban on rental increases for residential and commercial properties.
- Rental waivers and deferrals for commercial tenants with and annual turnover under $50 million who have experienced more than a 30 per cent reduction in turnover due to coronavirus.
For more information click here.
Payroll tax refunds and deferrals
Businesses with annual taxable wages of up to $3 million will be eligible for a full refund of payroll tax for the 2019-2020 financial year.
Eligible business must continue to lodge returns but do not need to make further payments for the 2019-20 financial year.
Eligible businesses will be contacted by the State Revenue Office in relation to the reimbursement of paid payroll tax. Small business may also apply to defer payroll tax payments for the first quarter of the 2020-21 financial year.
For more information click here.
Queensland
Payroll tax relief
Businesses with less than $6.5 million in Australian taxable wages may be eligible for a number of payroll tax relief measures from the Queensland government.
These measures include;
• refunds of payroll tax for 2 months
• a payroll tax holiday for 3 months
• deferral of payroll tax for the 2020 calendar year
Businesses that pay more than $6.5 million in wages and have been directly or indirectly affected by the coronavirus, can also apply for the refund and deferral. In order to take advantage of these measures business must apply online.
For more information click here.
Interest-free loans
The Queensland state government is also offering low-interest loans of up to $250,000 to help small businesses retain employees and maintain operations during the coronavirus outbreak. The loans, which will be administered by the Queensland Rural and Industry Development Authority will be interest-free for the first 12 months.
To apply business must first register their interest with the authority.
For more information click here.
Western Australia
Payroll tax grants and deferrals
The Western Australia state government is providing small businesses with a payroll of between $1 million and $4 million a one-off grant of $17,000. The grants will be paid automatically by cheque and are expected to start being distributed by July.
Like NSW, Western Australia has also brought forward scheduled payroll tax cuts, increasing the payroll tax threshold to $1 million from 1st July 2020.
Small-to-medium sized businesses with annual wages of less than $7.5 million will have payroll taxes waived until the end of the financial year. The waiver replaces the payroll tax deferral previously announced by the Western Australia government.
A business is ‘affected’ if turnover, profit, customer numbers, bookings, retail sales, supply contracts, or other factors have seen a negative impact. Businesses must apply for this deferral online.
For more information click here.
Rental Relief
The Western Australia government has announced a number of measures in-line with their national cabinet commitments on rental relief. These measures include;
- A six-month moratorium on evictions due to non-payment of rent.
- A six- month freeze on rent increases for commercial properties.
- A resolution mechanism for disputes arising out of, or in relation to, the operation of the legislation or code of conduct, including a mechanism to protect landlords where tenants are refusing to pay rent despite the capacity to do so.
These measures also prohibit landlords progressing against a tenant for a breach that occurred after 30 March 2020, but before the new measures come into operation.
For more information click here.
Rental Waiver for Government Tenants
The Western Australia state government has announced it will waive rental payments for small businesses and not-for-profit groups in Government-owned buildings for six months.
Small businesses include those owned and operated by an individual, partnership or proprietary company with a relative small market share and are not a subsidiary of a larger business, as defined by the Small Business Development Corporation Act 1983.
Not-for-profits include all charities and associations defined by the Associations Incorporation Act 2015.
For more information click here.
Northern Territory
Business improvement scheme
The Northern Territory government has unveiled $20 million business improvement scheme.
Under the scheme, $10,000 grants will be made available for businesses to purchase goods and services to make permanent physical improvements to their premises. Any improvements made must help to improve business operations or customer experience.
If business owners can also contribute $10,000 in capital, the Northern Territory government will provide and additional $10,000.
For more information click here.
Australian Capital Territory
Payroll tax deferral
All ACT businesses with group Australia-wide payroll of less than $10 million can apply to defer their 2020-21 payroll tax, interest free until 1 July 2022. Businesses will need to complete an online application form to confirm their eligibility.
Eligible businesses will still be required to their payroll tax returns as normal but will not be required to make the associated payment at the usual time. If the deferred amount is paid prior to 1st July 2022, no interest will be charged. Interest will be applied to any outstanding deferred amounts from 1 July 2022.
For more information click here.
Commercial Property Rates Rebate
ACT Commercial property owners with an Average Unimproved Value below $2 million are eligible for a rebate on their commercial rates fixed charge.
Commercial rate payers 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.
Where rate payers have paid in full or have a quarter bill less than the credit, they will be eligible for a refund. Businesses eligible for the refund will need to apply online. Commercial property owners will also not receive an increase on their 2020-21 Fire and Emergency Services Levy.
For more information click here.
South Australia
Payroll tax waiver & deferral
Businesses with annual wages of less than $4 million will receive a six month payroll tax waiver. Eligible businesses wll be notified by Revenue SA through RevenueSA online. Monthly payroll tax returns must still be lodged to capture wages for the month, with no payment to be made.
Businesses with annual Australian grouped wages above $4 million that can demonstrate they have been significantly impacted by COVID 19 will, upon application, be able to defer payroll tax payments for the six months from April to September 2020. For these eligible businesses, payroll tax payments that were due to be paid from April to September will now be due in October 2020.
For more information click here.
Deferral of land tax
Businesses and individuals paying land tax quarterly in 2019-20 will be able to defer payment of their third and fourth quarter instalments for up to six months.
Businesses and individuals will be sent their land tax notices of assessment as usual, with information provided on how the deferral will be administered.
For more information click here.
Business and Jobs Support Fund
The South Australian government has also created a $300 million business and jobs support fund. The priority of the fund is thee ongoing survival of businesses and minimising job losses.
Businesses are encouraged to work with their representative bodies when making a submission so that the broad impacts across each sector can be fully understood.
For more information click here.
Tasmania
The Tasmanian government is currently focusing its economic stimulus measures on the most severely affected industries i.e. retail, hospitality, tourism and fisheries. However, with new measures being announced almost daily by the state and federal governments, these programs may be expanded to include more small businesses.
For more information on these programs click here.