The Commonwealth and State Governments are supporting households and businesses to deal with the economic consequences of Coronavirus. The initial Commonwealth Government Economic Response was announced on 12 March 2020 with a second stimulus announced on 22 March to support workers, businesses and the community.
The Commonwealth Government’s economic response targets three areas:
The Government is supporting businesses to manage cash flow challenges and retain employees. Assistance includes cash flow support and measures to provide relief for financially distressed businesses. Elements of the Economic Response for Australian businesses include:
Boosting cash flow for employers
Temporary relief for financially distressed businesses
Increasing the instant asset write-off
Backing business investment
Supporting apprentices and trainees
Find Out How Much Your Business Is Eligible For
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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. These payments will help businesses and NFPs with their cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.
Under the enhanced scheme, employers will 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.
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.
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 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 Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
The Government is introducing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
The Government is supporting small business 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 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).
The Australian Government is providing financial assistance to Australians. This assistance includes income support payments, payments to support households and temporary early releases of superannuation.
Over the next six months, the Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. This will be paid to both existing and new recipients of JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
The Government is providing 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.
The Government is allowing 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 and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
The Government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for 2019-20 and 2020-21. This measure will benefit retirees holding these products by reducing the need to sell investment assets to fund minimum drawdown requirements.
On 12 March, the Government announced a 0.5 percentage point reduction in both the upper and lower social security deeming rates. The Government will now reduce these rates by another 0.25 percentage points. As of 1 May 2020, the upper deeming rate will be 2.25 per cent and the lower deeming rate will be 0.25 per cent. The reductions reflect the low interest rate environment and its impact on the income from savings.
The Government, the Reserve Bank of Australia and the Australian Prudential Regulation Authority have taken coordinated action to ensure the flow of credit in the Australian economy. Timely access to credit is vital for businesses to manage the impacts of the Coronavirus.
Support for immediate cash flow needs for SMEs
Under the Coronavirus SME Guarantee Scheme, 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.
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.
businesses whose total grouped Australian wages for the 2019/20 financial year
is less than $10M:
will have their annual tax
liability reduced by 25% when they lodge their annual reconciliation,
which is due on 28 July.
For those customers who lodge
and pay monthly will have no payment required for the months of March,
April or May 2020 will be required. ie. the payroll tax is completely
When lodging your annual
reconciliation, you will still need to provide wage details paid in these
months and will receive the benefit of a 25% reduction in the amount of
tax you would have had to pay for 2019-20.
How to apply?
will be automatically applied for the payroll tax returns covering above
The New South Wales government is
also scrapping certain fees and charges that apply to businesses in vulnerable
These include fees for bars,
cafes, restaurants and trades people.
The state government has pledged
$250 million to employ additional cleaning staff for public infrastructure,
such as public transport assets, schools and public buildings.
government has announced $250 million to spend on fast-tracking the maintenance
of public assets, including social housing and fencing, as well as $500
million to bring forward capital works and maintenance.
Business Grants for Melbourne Businesses
city of Melbourne is offering $5 million in grants for small to medium sized
businesses to invest in online and e-commerce capabilities, take part in
training and professional development, and undertake capital works.
to $5000 for investing in online and e-commerce activities.
to $2000 for training and professional development.
to $10,000 for capital works projects (matching dollar-for-dollar) to
adapt to changing conditions.
you are an employer (or part of a group of employers) who pays more
than $6.5 million in Australian taxable wages and have been
negatively affected (directly or indirectly) by coronavirus, you can apply for
of payroll tax for the 2020 calendar year (If you have already applied for
a deferral, you do not need not reapply – it will be extended.)
of your payroll tax for 2 months.
business is directly or indirectly affected by coronavirus if their current
turnover, profit, customers, bookings, retail sales, supply contracts or other
factors are negatively affected compared with normal operating conditions.
payroll tax threshold will be increased to $1 million on 1 July 2020. This
brings the increase forward from the planned date of 1 January 2021 and
will result in approximately an additional 300 businesses no
longer being liable for payroll tax. The threshold increase will be
reflected in Revenue Online when it comes into effect.
one-off grant of $17,500 will be available for employers, or groups of
employers, whose annual Australian taxable wages are more than $1 million
and up to $4 million. For a group of employers, a single grant will be
payable to the designated group employer. You do not need to apply for the
grant. Grants will automatically be paid by cheque from July but
there will be delays for taxpayers whose tax status changed in
2018-19 or who became liable for payroll tax during the 2018-19 or
2019-20 assessment year. Eligible taxpayers should log in
to Revenue Online to ensure their postal address is correct.
Interest Free State Government Loans
million in interest-free loans available to small businesses in the
hospitality, tourism, seafood production and export sectors.
with turnover of less than $5 million will be eligible, and the loans are
intended to be used for purchasing of equipment, or for restructuring
will be offered interest-free for three years. Details on how to apply
have not yet been released.
Payroll Tax Concessions
tax waiver will be available to businesses in the hospitality, tourism and
seafood industries, and will apply for the last four months of the 2019-20
businesses with payrolls of up to $5 million will also be able to apply
for a waiver, but eligibility will be based on how significantly the virus
has affected business.
details on this criteria have not yet been released.
Business Improvement Grant
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.
business is only eligible to receive one grant, and it can be used to
complete one or two different jobs on their premises.
grant can be used to purchase goods and services to make permanent
physical improvements to a business (land and / or building) that help
improve its efficiency and customer experience.
for businesses to provide services open 30 March 2020.
Businesses can apply for a grant from 13 April 2020.
Instant Tax Refunds are our specialty. Call 1300 829 863 Tax Today, Australia’s leading Tax Agents that provide Instant Tax Refunds, have offices in Sydney, Melbourne and Brisbane. You can even do the tax return online.