COVID-19 Updated Stimulus Measures

The information below provides a collation of information, including press releases over the weekend.  Please note, the federal bills are in Parliament at this present time. Amidst the uncertainty that we are all confronted with, here is what is known about proposed measures both at state and federal levels. I have provided hyperlinks below to provide more detail where it is available. I am also here to discuss any of the matters below and will provide updates.
 
Over the weekend the federal government expanded their announced stimulus measures providing in total $189 billion of support.
 

Business support

SMEs and not for profits that employ workers will benefit from a tax-free support payment linked to their salary and wage obligations. It will be calculated automatically by the ATO where applicable.  For quarterly payers, the payment is linked to PAYG obligations for the March and June 2020 quarters, with an additional payment for the quarters ending June and September 2020.  For monthly payers, the payment is linked to the March- June 2020 activity statements (4 months) with additional payments for the months of June – September 2020. Eligible employers will receive a payment equal to 100% of the PAYG withheld, up to a maximum of $50,000.  A minimum payment of $10,000 will be paid even where no PAYG withholding obligations arise. The support payments come with a qualification, payable only to “active eligible employers established prior to 12 March 2020”.  An exception is made for registered charities, regardless of when they are registered. 
 
Payments will be made to the activity statement account.  Therefore, a support payment will apply firstly as a reduction of any outstanding activity statement obligation.
 
An additional wage subsidy of 50 percent is available to support the payment of apprentices’ and trainees’ wages by businesses employing fewer than 20 full time employees. The subsidy is calculated based upon wages paid to apprentices and trainees during the period 1 January 2020 - 30 September 2020. 
 
Reference: Cash flow assistance for businesses fact sheet, Treasury
 

Instant asset write-off and investment incentive

There is no change to the measures announced in the round one stimulus package.

An increase to the instant asset write-off threshold to $150,000 up from $30,000 for businesses with a turnover of up to $500 million, until 30 June 2020.

Accelerated depreciation benefits in respect of asset purchases costing more than the relevant instant asset write off threshold but not including purchases of second-hand assets, buildings and capital works.
 
Reference: Delivering support for business investment fact sheet, Treasury

Financial support to business and relief for financially distressed business

Support is available for business by way of a loan guarantee scheme. Government will provide a guarantee of 50 percent to financial institutions making loans to SMEs of up to $250,000. The loans are unsecured and for a duration of up to three years and provide a six-month repayment holiday. 
 
Loans will still be subject to lenders’ credit assessment processes, however it would be expected that access to credit is enhanced through $90 billion of additional funding provided by the RBA at a fixed rate of 0.25 per cent and a temporary exemption from responsible lending obligations.
 
For directors of a businesses that are struggling, thresholds for statutory demand have been temporarily increased and more time is allowed for the business to respond to demands of a creditor. This is potentially double-edged sword depending on your aspect in the debtor/creditor relationship.  Temporary relief (6 months) is provided from directors’ and officers’ personal liability that would otherwise arise from insolvent training. Note, where insolvent trading is a possibility, businesses and their directors would be advised to engage early to seek help so that available options can be fully explored.
 
References:
Supporting the flow of credit fact sheet, Treasury
Temporary relief for financially distressed business fact sheet, Treasury
 

Household support

Households may benefit from expanded eligibility to income support payments. A supplement is payable at a rate of $550 per fortnight, for the next 6 months and on top of their current entitlements. The supplement will be paid to existing and new recipients of JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment Farm Household Allowance and Special Benefit.
 
Early release of superannuation up to $20,000 is permitted over the current and next financial year (a maximum of $10,000 each financial year).
 
Superannuation minimum drawdown rates will reduce by 50 percent for the current and next financial year, with the aim to provide retirees with flexibility on how they manage their superannuation assets.
 

Victorian government relief measures

Payroll tax measures include waiver of the total payroll tax bill for 2019/20 for businesses with annual taxable wages up to $3m. In addition, a deferral will apply for the first quarter of the new financial year.
 
A land tax deferral is available for landholders that have at least one non-residential property and total taxable landholdings below $1m.  Payments ordinarily due after May 2020 will be deferred until after 31 December 2020. The SRO will administer this concession and will contact eligible taxpayers.
 
Liquor licensing fees for the current financial year are waived.
 
State Revenue Office press release
 

Other state relief measures

Other states have published information about relief measures and interest free loans (Queensland only)
 
NSW:
Payroll tax relief
 
Queensland:
Payroll tax deferral and low interest loans (12 month interest free period) access the loan application here
 
Tasmania:
Payroll tax relief measures for hospitality, tourism and seafood industries, waiver for small employers and rebate for youth employment.
 
Western Australia:
Payroll tax grant for small businesses and deferral, as well as household support measures.

Lastly, Fairwork Australia has updated their website, including additional and updated information around health and safety in the workplace around the coronavirus.
 
Additional assistance specific to severely affected communities, regions and industries, may be available as well as support from the ATO in relation to debt management.
 
I am here to help and there may be strategies to work through to help pivot your businesses and managing the business challenges that lie ahead. Stay safe.
 
Sincerely, 
Leanne