Federal & State Government Stimulus Measures
In addition to the measures announced by the Federal Government, the Prime Minister and Treasurer have revealed their plans to subsidise the wages of working Australians as part of the JobKeeper payment.
The JobKeeper Scheme will see:
- Businesses receive the JobKeeper payment of $1500 a fortnight per employee, regardless of their salary. Employers may top up wages beyond that amount.
- The payment will be administered through the single touch payroll system, which means businesses will need to keep the employee on the books in order to distribute the allowance.
- Businesses and not-for-profits will be eligible for the scheme after a downturn in revenue of 30 per cent.
- The payment will be delivered through the Australian Tax Office in May but will be backdated to March 1.
- New Zealanders and casual employees working for more than one year will be eligible for the payment.
- The government says the scheme will cost $130 billion over six months and it expects the payments will support the wages of up to six million Australians. Parliament will be recalled to pass the legislation.
Parking Australia urges all members to register their businesses for the JobKeeper updates by following this link https://www.ato.gov.au/general/gen/JobKeeper-payment/
The previously announced measures are to assist businesses with cash flow challenges and to retain employees. These measures are targeted at five main areas:
- Boosting cash flow for employers
- Temporary relief for financially distressed businesses
- Increasing the instant asset write-off
- Backing business investment
- Supporting apprentices and trainees
In addition to this, the Government have made commitments regarding the flow of credit and an SME Guarantee Scheme.
Booting cash flow for employers
The main announcement is that Government are providing up to $100,000 to eligible small and medium-sized businesses, and not-for profits that employ people with a minimum payment of $20,000. To qualify a business must have an annual turnover of less than $50 million and employ workers.
The scheme will see employers receive a payment equal to 100 per cent of their salary and wages withheld. An additional payment is also being introduced in the July-October period.
Parking Australia suggests members contact their accountants to see if the payments apply to their businesses. Follow the link to the Treasury fact sheet https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Cash_flow_assistance_for_businesses_0.pdf
Temporary relief for financially distressed businesses
The Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive. The package also includes temporary relief for directors from any personal liability for trading while insolvent, and providing temporary flexibility in the Corporations Act 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.
These actions include those issued by the ATO who have been directed to tailor solutions for businesses. Follow the link to the Treasury fact sheet https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Providing_temporary_relief_for_financially_distressed_businesses.pdf
Increasing the instant asset write-off
The instant asset write-off threshold has been increased to $150,000 and for businesses with an annual turnover of less that $500 million. Follow the link to the Treasury fact sheet https://treasury.gov.au/sites/default/files/2020-03/Fact_Sheet-Delivering_support_for_business_investment.pdf
Backing business investment
The Government is accelerating depreciation deductions for the next 15 months. Businesses with a turnover of $500 million with be able to deduct 50 per cent of a cost of an eligible asset on installation, with existing depreciation rules to apply to the balance of the asset’s cost.
Follow the link to the Treasury fact sheet https://treasury.gov.au/sites/default/files/2020-03/Fact_Sheet-Delivering_support_for_business_investment.pdf
Supporting apprentices and trainees
To assist small business employers to retain their apprentices and trainees, the Government is allowing eligible employers to apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for 9 months, from 1 January 2020 to 30 September 2020.
Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
Coronavirus-affected regions and communities
The Government will set aside $1 billion to support regions most significantly affected by the Coronavirus outbreak. These funds will be available to assist during the outbreak and the recovery. In addition, the Government is assisting our airline industry by providing relief from a number of taxes and Government charges estimated to total up to $715 million. Follow the link to the Treasury fact sheet:
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet Assistance_for_severely_affected_regions_and_sectors.pdf
Coronavirus SME Guarantee Scheme
The Coronavirus Small and Medium Enterprises (SME) Guarantee Scheme will support up to $40 billion of lending to SMEs. Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs.
Follow the link to the Treasury fact sheet https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Supporting_the_flow_of_credit_1.pdf
Quick and efficient access to credit for small business
The Government is cutting red tape by providing a temporary exemption from responsible lending obligations, for lenders providing credit to existing small business customers. This reform will help small businesses get access to credit quickly and efficiently.
Follow the link to the Treasury fact sheet https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Supporting_the_flow_of_credit_1.pdf
State and Territory Initiatives
New South Wales
- The creation of a $1 billion Working for NSW fund to sustain business, create new jobs and retrain employees
- Deferral of payroll tax for business for six months
- Deferral of gaming tax six months
- Deferral of the parking space levy for six months
- Deferral of rents for six months for commercial tenants with less than 20 employees in all Government-owned properties
- Waiving 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
- Bringing forward capital works and maintenance
Victoria
- Establishment of $500 million to establish a Business Support Fund
- Refund of payroll tax for 2019-20 for businesses with a payroll of less than $3 million
- Deferral of payroll tax until 1 January 2021
- Deferral of land 2020 land tax payments for eligible small businesses
- Waving of 2020 liquor license fees
- Under the $500 million Working for Victoria Fund, displaced workers will be eligible to apply for different types of work
- Rent relief for commercial tenants in government buildings
- Fast tracking outstanding supplier invoices
Queensland
- Payroll tax relief – Immediate payroll tax refunds will be provided for COVID-19 affected businesses. Eligible businesses can also apply for deferral until the end of 2020 and a payroll tax holiday for 3 months.
- Power bill relief – 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.
- $500 million jobs support loans – The concessional loan facility comprises low interest loans of up to $250,000 for carry on finance with an initial 12-month interest free period for businesses to retain staff. Any eligible business can apply for a loan.
- $500 million worker retraining and assistance – Up to $500 million will be spent to assist workers who lose their job or income with retraining, job-matching and other help to transition into jobs in the industries such as health care, agriculture, food production, transport, cleaning and mining.
- Six months relief for businesses renting government premises.
- $1 billion Industry Support Package to assist large businesses through this period to ensure they will be able to scale up and service the community when economic activity improves. The package will be focused to support businesses.
Fact sheet: https://www.business.qld.gov.au/__data/assets/pdf_file/0024/290715/coronavirus-covid-19-business-support.pdf
Western Australia
- One-off grants of $17,500 to small and medium businesses – Small and medium businesses whose annual Australian Taxable Wages are between $1 million and $4 million will receive a one-off grant of $17,500.
- The payroll tax threshold will be increased to $1 million from 1 July 2020, six months earlier than planned.
- Small and medium sized businesses can apply to defer payment of their 2019-20 payroll tax until 21 July 2020.
- Provision of guidance to clarify the criteria that can be applied in granting exemption from exploration expenditure requirements in Western Australia.
- Freezing of household fees and charges, including electricity, water, motor vehicle charges, the emergency services levy and public transport fares.
South Australia
- $300 million Business and Jobs Support Fund – A fund to support individual businesses and industry sectors directly affected by coronavirus, and face potential collapse
- $250 million Community and Jobs Fund – A fund to support community organisations, sporting, arts and recreational bodies, non-profit organisations as well as some industry sectors whose operations have been impacted by the coronavirus
- Fast tracking of infrastructure
- Payroll tax relief (Up to $60 million of savings to business)
- Land tax relief (Up to $13 million in additional savings)
Tasmania
- $20 million in interest free loans to small businesses in the hospitality, tourism, seafood production, and exports sectors.
- 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 virus, to have their payroll tax waived for April to June 2020.
- $50 million allocated to fast track maintenance on public buildings over the next 12 months.
- Targeted Small Business Grants Program for Apprenticeships and Traineeships
- Youth Employment Scheme providing a payroll tax rebate for one year for an employee under the age of 24.
- Human Resource and Industrial Relations Assistance. $80,000 will be provided to the Tasmanian Chamber of Commerce and Industry (TCCI) to provide Human Resources and Industrial Relations assistance associated with the coronavirus to businesses.
- $50 million in interest free loans over three years will be made available to encourage Local Government to upgrade, renovate and to do necessary maintenance to improve assets
Northern Territory
- $30 million Home Improvement Scheme
- $20 million Business Improvement Scheme.
- Freeze fees, charges and electricity prices until July 2021
- The NT Government said it will prioritise stimulus funding towards the hospitality sector
ACT
- Freeze of ACT Government fees and charges, including the fire and emergency services levy, public transport, vehicle registration and parking fees.
- A rebate on the fixed charge for 2019-20 on commercial rates for properties with an AUV below $2 million.
- Businesses who lease premises will receive a six-month waiver on payroll tax for hospitality, creative arts and entertainment industries
- Access to interest free deferrals of payroll tax commencing 1 July 2020 for all businesses up to a payroll threshold of $10 million.
- $20 million to be immediately spent on infrastructure projects and maintenance on local schools, roads, and public transport.
- $500,000 round of grants funding for the arts sector.
- Additional funding of $7 million for our non-government organisation partners to meet increased service demand for emergency relief.
- ACT Government agencies have been instructed to prioritise the processing of development applications.