Dear Member,
Re: Coronavirus State and Commonwealth business assistance
You may have heard over the weekend that Premier Daniel Andrews and Prime Minister Scott Morrison announced further packages designed to keep business in business and Australians in jobs. We have summarised the key initiatives to benefit businesses and impacted workers below:
Victorian State Business Assistance Package
The Victorian Government has announced a $1.7 billion economic survival and jobs package, which has been developed following discussions at National Cabinet and complements the work of the Federal Government. Key elements are as follows:
Payroll tax refunds
The Victorian Government will provide full payroll tax refunds for the 2019-20 financial year to small and medium-sized businesses with payroll of less than $3 million. Payments will start flowing next week and will save eligible business up to $113,975 a year, with businesses saving an average of $23,000. These businesses employ around 400,000 workers. This assistance is a refund, not a loan.
The same businesses will also be able to defer any payroll tax for the first three months of the 2020/21 financial year until 1 January 2021, freeing up a further $83 million in cashflow.
Prompt payment of outstanding supplier invoices
The Victorian Government will pay all outstanding supplier invoices within five business days – releasing up to $750 million into the economy earlier. The private sector is urged to do the same where possible. The Government will also support the hospitality sector by waiving liquor licensing fees for 2020 for affected venues and small businesses.
Business Support Fund
The Victorian Government has announced $500 million to establish a Business Support Fund to assist small to medium businesses most impacted by the COVID-19 outbreak. The Government will work with the Victorian Chamber, Australian Hotels Association and Ai Group to administer the fund to help businesses survive and keep people in work.
To register your interest in the receiving more details of the program, click this link, https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/economic-survival-and-jobs-package
Working for Victoria Fund
The Government announced a $500 million Working for Victoria Fund in consultation with the Victorian Council of Social Services and Victorian Trades Hall Council, to help workers who have lost their jobs find new opportunities, including work cleaning public infrastructure or delivering food. It will assist skills development or help people in obtaining immediate accreditation to commence work, and will facilitate job matching to help Victorians find short-term or casual roles.
Workers wanting to register interest in the program should visit this weblink:
https://www.vic.gov.au/workingforvictoria
Commonwealth Business Assistance Package
On 22 March the Prime Minister announced that a total of $189 billion is being injected into the economy by all arms of Government in order to keep Australians in work and businesses in business. This includes regulatory protection and financial support for businesses to stay in business. The key measures announced so far are:
Boosting Cash Flow for Employers
The Government is providing up to $100,000 to eligible small and medium sized businesses, and not‑for-profits (including charities) that employ people, with a minimum payment of $20,000. These payments will help businesses’ and not-for-profits’ cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.
Under the enhanced scheme from the first package, 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. The payment will be available from 28 April 2020.
By linking the payments to business to staff wage tax withholdings, businesses will be incentivised to hold on to more of their workers. The payments are tax free, there will be no new forms and payments will flow automatically through the ATO.
Coronavirus SME Guarantee Scheme
The Government will establish the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SMEs) to get access to working capital to help them get them through the impact of the coronavirus.
Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs. The Government’s support will enhance lenders’ willingness and ability to provide credit to SMEs with the Scheme able to support $40 billion of lending to SMEs.
The Scheme will complement the announcement the Government has made to cut red-tape to allow SMEs to get access to credit faster. It also complements announcements made by Australian banks to support small businesses with their existing loans.
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. The Corporations Act 2001 will be amended to provide temporary and targeted relief for companies to deal with unforeseen events that arise as a result of the Coronavirus.
The different aspects of the Commonwealth’s package supporting businesses and Australian workers set out at the following link:
https://www.pm.gov.au/media/supporting-australian-workers-and-business
Personal income security
Information about personal income security is at the link below. Importantly for some, the Government is temporarily expanding eligibility to income support payments to sole traders and self-employed people, 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 the JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
https://www.dss.gov.au/about-the-department/coronavirus-information-and-support
Again we recommend you take the time to consider which of these initiatives best suit your business needs at this time, and suggest strongly that you include your accountant in such deliberations.
Regards,
Stuart Dawson
Manager, Member Services