Coronavirus Business Assistance – Federal and State Government responses – so far….

The Federal Parliament are meeting today to fast track economic stimulus measures announced on 12 March and 22 March. The total estimated federal package comes to $189 billion or 9.7% of GDP, almost double similar plans around the globe.

Please be sure to keep up to date with this broader public health crisis via a reputable source of information. That is, if you find it on social media make sure you can also find it in another quality source of information.

For now we have summarized below the key business items below; this is a fluid list and we expect more stimulus to be announced in the coming week(s). The below are based on announcements only as we have not seen the legislation yet. There may be operative issues around eligibility, amounts and dates yet to be fine-tuned.

Australian Taxation Office and other Federal measures:

“Increased Instant Asset Write-off for Businesses” - new and second-hand assets from $30,000 to $150,000

Applicable from 12 March to 30 June 2020. Legislation to be passed this week. Expected to work exactly like the $30,000 write-off except accessible by businesses with turnover of up to $500 million.

“Backing Business Incentive for Businesses” - 50% immediate deduction for all NEW assets purchased

Applicable from 12 March to 30 June 2021. Legislation to be passed this week. Immediate 50% deduction available on purchase and then further deduction based on the businesses’ usual method of depreciation on the balance remaining after the 50% deduction. Accessible by business with turnover of up to $500 million.

“Boosting Cash Flow for Employers” - Tax free credit or refund against PAYG Withheld from Wages and Salaries

For Small and medium sized business and not-for-profits with turnover under $50 million who are established employers as at 12 March 2020, legislation to be passed this week. There is an exception for not-for-profits/charities that may be established after this date to assist with Coronavirus related issues.

Employers will receive a minimum of $20,000 up to a maximum $100,000 as a tax free PAYGW credit. However this will be split into two separate periods capped at $50,000 each period. The March to June period and the June to September period.

  • Employers who lodge PAYGW monthly will receive 300% of their March BAS PAYGW amount as a credit against their BAS account – if this results in a refund they will receive this after the 28 April 2020, within 14 days.
  • Employers who lodge quarterly will receive 100% of their March BAS PAYGW as a credit/refund.
  • For April, May and June the rate will be 100% for monthly lodgers and quarterly lodgers.
  • The March, April, May and June assistance will be capped at $50,000.
  • The second June payment will be 25% of whatever amount was claimed under the first $50,000 limit.
  • The July, August and September payments will be again 25% of whatever amount was claimed under the first $50,000 limit.

Helpful examples can be found here:

Supporting apprentices and trainees

Small businesses with fewer than 20 employees can be reimbursed up to a maximum of $21,000 per apprentice they employee from 1 January to 30 September 2020. Payable $7k per quarter for the three quarters, March, June and September.

If however a Small Business cannot retain the apprentice for the full 9 months and they are forced to change employers, the new employer is able to continue to claim irrespective of the new employer’s size. That is, the incentive follows the apprentice.

  • Employers can register from early April 2020 and must have claims in by 31st December.
Support for Coronavirus affected regions and communities

$1 billion to be channeled into most affected local economies. Tourism businesses operating in the Great Barrier Reef Marine Park, for example, have had the Environmental Management Charge waived as an immediate measure.

There will also be Assistance to tourism operators and exporters to help them locate alternative markets.

Financing and support for immediate cashflow needs of SME’s
  • Loan guarantee arrangements from government to banks in order to facilitate SME loans – please check with your bankers to see what assistance may be available
  • Reserve Bank of Australia injecting $90 bn to shore up the liquidity of Australian credit markets.
Insolvency and Bankruptcy – temporary relief for financially distressed businesses
  • Threshold for a creditor’s statutory demand on company increased from $2,000 to $20,000 for 6 months.
  • The time to respond to a statutory demand will be increased from 21 days to 6 months.
  • Small business creditors however, will still retain the right to enforce their debts, so the new threshold and time frame will not apply to them.

Queensland State Government Initiatives:

COVID-19 Jobs Support Loans
Expressions of interest being sought at this stage but the announcement was:
  • Up to $250,000 of “carry on” finance over 10 years
  • 12 months interest free
  • Loan to be used to retain staff
  • A pool of $500 million has been made available from the state budget.
  • Those who express interest will be contacted by QRIDA when the scheme is open to applications
Payroll Tax Deferral
  • State Tax paid by employers on the value of their payroll – once it exceeds $1.3 million is to be deferred for lodgement and payment until 31 July 2020.
  • The southern states have been more accommodating in the last 48 hours so we would expect the Queensland government to follow suit with further rebates and deferrals for this tax.

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