On the weekend Scott Morrison announced the federal government’s second round stimulus package and Daniel Andrews announced the state government’s plans for a stimulus package.
Boosting Cash Flow For Employers:
The Government is providing up to $100,000 to eligible small and medium-sized businesses, and not for-profits (NFPs) that employ people, with a minimum payment of $20,000.
The Government has enhanced its initial measures that it released on the 12th March 2020. Employers will now receive a payment equal to 100 per cent of their salary and wages withheld (up from 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.
Small and medium-sized business entities with aggregated annual turnover under $50 million and that employ workers are eligible for payment. Eligibility will generally be based on prior year turnover.
Eligible employers that pay salary and wages will receive a minimum payment of $10,000, even if they are not required to withhold tax.
The payments will be delivered by the ATO as a credit on activity statements from late April 2020 upon employers lodging eligible upcoming activity statement.
An additional payment is also being introduced in the July – October 2020 period. Eligible entities will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments they have received. This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments. To qualify for the additional payment, the entity must continue to be active.
Supporting Apprentices and Trainees
The Government is supporting small businesses to retain their 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. Employers will be
reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,500 per quarter).
For Further Details on above please see link below from federal government:
Access To Superannuation
Sole Traders or workers who have had their income or hours reduced by 20 per cent or more as a result of coronavirus will be able to access up to $10,000 of their superannuation tax free before 1 July 2020 (and another further $10,000 from 1 July 2020). The withdrawals will be tax free and will not affect Centrelink payments.
Jobseeker Payment (previously called Newstart)
The Jobseeker payment, formerly known as Newstart, will be paid at an additional rate of $550 per fortnight to both existing and new receipts during the coronavirus pandemic for six months. Under the sweeping changes to the welfare system, the government will also expand access to unemployment benefits by waiving the liquid assets waiting test, which will allow people to access income support without whittling down their savings. From 27 April, jobseekers will be eligible for a maximum base rate of $1115.70 a fortnight, excluding rent assistant and family payments. Asset testing for the payments will be waived for the six month period, while income testing will still apply to the individuals other payments, consistent with current arrangements. There is also an announcement of a $750 extra payment to low income earners and those on social security.
Guaranteeing Unsecured Small Business Loans
The Coronavirus SME Guarantee Scheme will provide support for businesses. Under the Scheme, the Government will provide a guarantee of 50 per cent to SME lenders for new unsecured loans to be used for working capital. This will enhance these lenders’ willingness and ability to provide credit, which will result in SMEs being able to access additional funding to help support them through the upcoming months.
SMEs with a turnover of up to $50 million will be eligible to receive these loans.
The Government will provide eligible lenders with a guarantee for loans with the followings terms:
Maximum total size of loans of $250,000 per borrower.
The loans will be up to three years, with an initial six month repayment holiday.
The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.
Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take
into account the uncertainty of the current economic conditions.
As part of the loan products available, the Government will encourage lenders to provide facilities to SMEs that only have to be drawn if needed by the SME. This will mean that SME will only incur interest on the amount they draw down. The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.
Bank Loan Repayments – 6 Month Deferral on Loan Repayments
Australian Banking Association announced a small business relief package from Australian banks.
Banks will defer small business loan repayments for six months to support small business borrowers through the coronavirus crisis. Banks are also open to considering cases of mortgage hardship.
Payroll Tax Relief:
Businesses with Payroll of less than $3 million will get a full payroll tax refund from government for the 2019/2020 financial year.
Business will be able to access the payroll tax cash refunds by next Friday.
Payroll tax that was paid by eligible businesses in the first three quarters of this financial year refunded.
The same businesses will also be able to defer any payroll tax for the first three months of 2020/21 financial year.
Other measures from State Government:
New range of measures such as the waiving the liquor licence fees due this month for 12,500 venues.
$500 million would be put into a fund for hardship payments, small grants and tailored support which would be distributed in consultation with the Victorian Chamber of commerce and Industry, the Australian Hotels Association, the Australian Industry Group, and other industry representatives.
See link to State Governments new measures:
Please do not hesitate to contact us on 03 9551 2822 to discuss your circumstances before acting on these changes.