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What the latest Australian government relief packages mean for you

Federal, state and local governments have announced substantial relief packages in response to the economic consequences of COVID-19.

In this post, we have attempted to collate these offerings to help you get through this extremely difficult time.

Please keep in mind that there is still a lot of ‘grey area’ around much of the legislation.

So, if you are interested in accessing support - your next step should be to speak with a relevant advisor (accountant, personal banker, etc) or with the government institution directly.

We’re closely monitoring announcements and will update this article accordingly.

BUSINESSES

VIC

VIC Business Support Fund - Up to $10,000
The $500 million Business Support Fund has been launched by the Victorian Government to support the hardest-hit sectors including tourism, retail, hospitality, arts and entertainment, and accommodation. The funding can be used towards expenses such as rent, utilities, salaries, and activities like marketing and communications. The due date for applications is 1 June 2020

Payroll Tax Refunds
All Victorian businesses with an annual taxable wage below $3 million will be exempt from payroll tax and do not need to make further payments for the 2019-20 financial year, but should continue to lodge returns. Eligible businesses will be directly contacted by the State Revenue Office in relation to reimbursement of the financial year’s payroll tax that has already been paid.

NSW

Small Business Support Grant - Up to $10,000
Eligible small businesses in NSW that have been severely affected by the pandemic can access up to $10,000 in grants. This can only be used for unavoidable expenses such as utilities, insurance payments, council rates, telecommunication charges, etc. Applications can be submitted until 1 June 2020.

Canterbury Bankstown Smart City Smart Business Grants - Up to $2000
A total of $250,000 has been allocated to assist businesses in these local government areas to develop their online marketing and e-commerce capabilities like website development or improvements. The funding will be dollar for dollar up to a maximum of $2000. 


QLD

Small Business Digital Grants Program - Up to $10,000 (Round 8 TBC)
Small businesses with headquarters in Queensland can access this grant to use towards digital technologies and services. Round 8 is yet to open for applications. You can save the page and check back later or even subscribe to their newsletter to receive updates about the grant.  

SA

$10,000 Emergency Cash Grants for Small Businesses
Small businesses highly impacted by the pandemic may be eligible for this grant to support the operations of their business. Evidence of eligibility for JobKeeper will show that you are ‘highly impacted’. The due date for applications is on 1 June 2020.


TAS

City of Hobart eCommerce Support Grants - Up to $300

This quick response funding is accessible by retail businesses in the city of Hobart to cover fees associated with selling goods via an eCommerce platform. Applications are open (since 2 April 2020) and will be available until funding is exhausted.

WA

Payroll Tax Relief Grant - $17,500
The WA Government has announced this one-off grant for businesses with annual taxable wages between $1 million and $4 million. For businesses with taxable wages below $7.5 million, Payroll tax will be waived between March and June.

NT

Small Business Survival Fund
This $50 million initiative is to support local businesses affected by a significant reduction in trade due to the pandemic. Eligible businesses will have access to four payments depending on the size of the organisation - Immediate Survival Payment of up to $50,000, Rapid Adaption Payment of up to $5000, Operational Boost Payment of up to $42,000, and Operational Support Payment of up to $15,000 (per fortnight). Applications close on 1 June 2020.

AUSTRALIA WIDE

Budget Direct Sponsorship Solved Grant - Up to $10,000
Businesses that require sponsorship to support local communities may be eligible to apply for a Budget Direct sponsorship of $1000, $2500 or $5000. The next round of applications closes on 31 May 2020.

Boosting Cash Flow for Employers - Up to $100,000
Eligible businesses can receive tax-free cash flow boosts of between $20,000 and $100,000. This will be delivered through credits when businesses lodge their activity statements. 


JobKeeper Payment

The Federal Government will provide a wage subsidy of $1,500 per fortnight (before tax) to workers who will receive it through their employer. Businesses significantly affected by COVID-19 may be eligible to receive the payment for up to six months, for each eligible employee.

Increase in Instant Asset Write-off
There will be an increase in the instant asset write-off from $30,000 to $150,000, and accessibility will be expanded to include businesses with aggregated annual turnover below $500 million until 30 June 2020.

Wage Subsidy for Apprentices and Trainees
To help small businesses retain their apprentices and trainees, the government is providing a wage subsidy of 50 percent of their remuneration for 9 months from 1 January 2020 to 30 September 2020. To be eligible, the business will be employing fewer than 20 full-time staff who retain a registered apprentice or trainee.

Temporary Relief to Businesses Facing Financial Distress

  • The government has made a temporary increase in the minimum threshold at which a statutory demand can be issued by creditors - from $2000 to $20,000 for six months. Companies currently also have an extended time frame to respond to statutory demands from creditors - from 21 days to six months.
  • Additional relief is available for holding companies and directors from any personal liability for debts incurred when trading while insolvent. This applies for six months only for debts incurred in the ordinary course of the company’s business.
  • The treasurer will be given a temporary instrument-making power to amend provisions of the Corporations Act 2001 temporarily. This aims to provide relief from specific obligations or the ability to modify obligations in order to enable compliance with legal requirements during this crisis.

LOANS

Guarantee Scheme for SME Lenders
It is easier to apply for business loans with the government’s cash flow assistance. A guaranteed 50 percent of loan proceeds will be available to small and medium business lenders to support new short-term unsecured loans. Commencing by early April 2020, the scheme will offer loans up to $250,000 per borrower, with a term of up to three years and a six month repayment holiday.

Quick and Efficient Access to Credit
A six-month exception from responsible lending is applied to any credit to small businesses to be used for business purposes, including new credit, credit limit increases, credit variations and restructures.

Supporting the Flow and Reducing the Cost of Credit
The Reserve Bank of Australia (RBA) will put downward pressure on borrowing costs for businesses and households. Banks will be able to access funding at a 0.25 percent fixed interest rate to reinforce the benefits of a low cash rate, which translates to reduced interest rates for borrowers.

 

INDIVIDUALS AND HOUSEHOLDS

Income Support for Individuals
Individuals may be eligible for a Coronavirus supplement of $550 paid fortnightly for 6 months to both existing and new recipients.


Working for Victoria Fund
Under the Victorian Government’s $500 million fund, workers who have lost their jobs will be eligible to apply for paid work across various sectors to contribute to Victoria’s ability to support the community and manage this event.


Support for Households
Social security, veteran, other income support recipients, and eligible concession cardholders can access two separate payments of $750 - first payment from 31 March 2020 and the second from 13 July 2020.


Early Access to Superannuation
Individuals can access up to $10,000 of their 2019-20 superannuation and an additional $10,000 in 2020-21. People will not need to pay tax on the amounts withdrawn, nor will it affect Centrelink or Vererans’ Affairs payments.


Reduction in Pension Minimum Drawdown Requirement
The minimum drawdown rate is temporarily reduced by 50 percent for account-based pensions and similar products for 2019-20 and 2020-21.


Reduction in Pension Deeming Rates
There is a reduction in both upper and lower pension deeming rates by 0.75 percent (which includes the 0.5 percent reduction announced on 12 March).



REFERENCES USED IN THIS ARTICLE:

The Treasury - Economic Response to the Coronavirus
The Treasury - $130 billion JobKeeper payment to keep Australians in a job
Highview Accounting & Financial - The latest on the Coronavirus Stimulus Package - what it means for you
City of Melbourne - COVID-19 business grants
Business Victoria - Business Support Fund
State Revenue Office Victoria - Tax relief for eligible businesses

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