The table below summarises the key measures announced in the second stimulus package for businesses, their employees and other targeted areas, including earlier announcements.
COVID-19: Federal tax support measures announced 22 March 2020
| EFFECTIVE FROM | CONDITIONS | BCR ADVISORY COMMENT | |
| BOOSTING CASH FLOW FOR EMPLOYERS – ENHANCED | |||
| Employer cash support payment up to $100k (increased from previously announced $25k support on 12 March 2020)
Payment calculation method also accelerated from 50% to 100% of PAYG withholdings Payments are tax free |
Covers amounts withheld from 1 January 2020 to 30 June 2020 (for monthly PAYG withholding lodgers it applies to amounts withheld from 1 March.
However, to provide a similar treatment to quarterly lodgers the payment will be calculated based on 3 times the March PAYG withholding) |
Aggregated turnover less than $50m (generally based on prior year turnover)
Now also includes Not-For-Profits and Charities that are employers Must have been an employer established before 12 March 2020 with an exception for Charities registered with the Australian Charities and Not-for-profits Commission (ACNC) Employers with nil PAYG withholding will have the minimum support payment increased from $2k to $20k |
The $100k cash support cap is effectively made of two components. The first component is a doubling of the boosting cash-flow support from $25k to $50k for March to June PAYG withholdings. The second component is a cash support payment equal to the first component received and applied to activity statements from June to September
Although this is welcomed relief, if your business has a running account deficit, it is unlikely that you will see any positive cash stimulus. BCR Advisory can provide you with alternative options. |
| GOVERNMENT LOAN SUBSIDY – SME GUARANTEE SCHEME | |||
| To enhance the ability for SMEs to obtain loans from lending institutions, a 50 per cent Government guarantee will be provided to SMEs for new unsecured loans to be used for working capital. A 6 month loan repayment holiday to be provided | New loans from early April to 30 September 2020 | Turnover up to $50m
Limit of $250k loan per borrower. Loans up to 3 years Loans will be based on lender’s loan conditions but the Government will be expecting lenders to look past current conditions when making loan assessments |
It is expected that many cash strapped SMEs may consider this option. Of note, no loan security will be required but still subject to lender’s lending requirements. |
| TEMPORARY RELIEF FOR FINANCIALLY DISTRESSED BUSINESSES – DEALING WITH CREDITOR DEMANDS | |||
| The current minimum threshold for creditors issuing a statutory demand under Corporations law will be temporarily increased from $2,000 to $20,000.
Timeframe for responses to a statutory demand will be extended temporarily from 21 days to 6 months |
Government has announced this will apply for a 6 month period | No specific conditions noted | Affected businesses should start liaising with their creditors. BCR Advisory can provide assistance where required. |
| TEMPORARY RELIEF FOR FINANCIAL DISTRESSED BUSINESSES – TRADING WHILST INSOLVENT | |||
| Temporary relief from personal liability for insolvent trading will apply with respect to debts incurred in the ordinary course of the company’s business | Government has announced this will apply for a 6 month period | Companies will still be liable for their debts | Our view is that the Safe Harbour regime should still be considered for a period of 12 months. This will allow business an additional 6 months to recover from the trauma. |
| TEMPORARY RELIEF FOR FINANCIALLY DISTRESSED BUSINESSES – BANKRUPTCY PROCEEDINGS | |||
| Threshold to initiate bankruptcy proceedings against a debtor will temporarily increase from $5,000 to $20,000 | Government has announced this will apply for a 6 month period | No specific conditions noted | Distressed businesses should consult an advisor. BCR Advisory can provide assistance where required. |
| CERTAIN CORPORATIONS LAW REQUIREMENTS TO BE RELAXED | |||
| Relief from specific Corporations Law obligations to be introduced including modifying certain obligations to enable compliance with legal requirements during the crisis | Six months from the date an instrument made by the Treasurer is made | Further details to be provided | The Government has announced that this could cover for example the requirement to hold certain AGMs as a result of social distancing measures. |
COVID-19: Federal tax support measures announced 12 March 2020
| EFFECTIVE FROM | CONDITIONS | BCR ADVISORY COMMENT | |
| ASSET WRITE OFFS | |||
| 100% write off for assets up to $150k | From 12 March 2020 until 30 June 2020 | Aggregated turnover less than $500m | Asset must be first used or installed ready for use by 30 June 2020 to qualify.
It is yet to be determined if cars are still subject to the cost limit for depreciation. |
| Upfront 50% deduction for “eligible assets” and existing depreciation rules applying to balance | Immediate effect for “eligible asset” purchases until 30 June 2021 | Aggregated turnover less than $500m | “Eligible assets” are new assets that can be depreciated for tax purposes, except second-hand assets. Therefore, this does not apply to capital works. |
| EMPLOYER CASH SUPPORT – SMALL TO MEDIUM ENTERPRISES | |||
| 50% of an apprentice or trainee’s wage over a 9 month period | Effective from 1 January 2020 to 30 September 2020 | For businesses with less than 20 full time staff who retain an apprentice or trainee. The apprentice/trainee must have been in training as at 1 March 2020. | Where a small business is not able to retain an apprentice, the subsidy will still be available to a new employer of that apprentice. |
Further details can be found here:
- Australian Government: Support for businesses
- Australian Government: Economic response to the Coronavirus
- Australian Tax Office: Support for large business impacted by COVID-19
New South Wales
| EFFECTIVE FROM | CONDITIONS | BCR ADVISORY COMMENT | |
| PAYROLL TAX: | |||
| Three month waiver of payroll tax | Immediate to 30 June 2020 | Payrolls up to $10m | Businesses will effectively receive a 25% reduction in their 2019-2020 payroll tax liability |
| Bring forward of higher payroll tax threshold limit from $900k to $1m | From 1 July 2020 | n/a | This measure has been brought forward from the later intended start date of 1 July 2021 |
| STATE FEES AND CHARGES: | |||
| Waiver of various State fees and charges | Further details to be provided | Further details to be provided but to be targeted at small businesses. | Intended to cover bars, cafes, restaurants and trade persons |
| PUBLIC WORKS AND INFRASTRUCTURE: | |||
| $250m to employ additional cleaners of public infrastructure | Further details to be provided | Further details to be provided | This will cover additional cleaning support for transport infrastructure, schools and public buildings |
| Over $250m to bring forward maintenance of public assets | Further details to be provided | Further details to be provided | This is to cover social housing and crown land fencing |
| $500m to bring forward capital works and maintenance | Further details to be provided | Further details to be provided |
Further details can be found here:
Queensland
| EFFECTIVE FROM | CONDITIONS | BCR ADVISORY COMMENT | |
| ASSISTANCE TO AFFECTED INDUSTRIES: | |||
| $27.25m package for tourism and seafood businesses | Further details to be provided | Must be in specific industries or regions | |
| $500M LOAN FACILITY: | |||
| Interest free loan facility for first 12 months | Further details to be provided | Loans up to $250k | Intended to assist businesses to retain staff |
| PAYROLL TAX: | |||
| Payroll tax deferral extended from SMEs to all businesses | Further details to be provided | Applies to all businesses impacted by COVID-19 | Eligible businesses in Queensland will not need to pay payroll tax until 3 August 2020 which includes the February 2020 payroll tax return |
Further details can be found here:
- Queensland Government: $27.25 million Coronavirus aid package
- Queensland Government: Palaszczuk Government offers $500m in loans to support workers in businesses affected by Coronavirus
Western Australia
| EFFECTIVE FROM | CONDITIONS | BCR ADVISORY COMMENT | |
| BUSINESS GRANTS: | |||
| One-off grant up to $17,500 to businesses who pay wages between $1m and $4m | Grants to be paid from 1 July 2020 | Based on annual Australian taxable wages between $1m and $4m | For employers grouped for payroll tax only a single grant will be paid to the designated group employer |
| PAYROLL TAX: | |||
| Payroll tax deferral offered to affected businesses by the coronavirus | Covers the 2019-20 monthly payroll tax payments until 21 July 2020 | Australian taxable wages do not exceed $7.5m and business has been affected by the coronavirus | The deferral mechanism is to be confirmed |
| Increase in payroll tax threshold to $1m brought forward by 6 months | Effective from 1 July 2020 | Current payroll tax threshold is $950k | |
| HOUSEHOLD RATES AND CHARGES FREEZE: | |||
| Planned increases to electricity, water, motor vehicle registration, ESL and public transport will not go ahead | Until at least 1 July 2021 | N/A | Intended to keep household costs at a manageable level |
| WELFARE SUPPORT: | |||
| The Energy Assistance Payment will double to $600 | Until 30 June 2021 | Must be an eligible concession card holder | Aimed to ease the financial burden for vulnerable citizens |
Further details can be found here:
- WA Government: COVID-19 payroll tax relief
- WA Government: COVID-19 economic response – relief for businesses and households
South Australia
| EFFECTIVE FROM | CONDITIONS | BCR ADVISORY COMMENT | |
| INFRASTRUCTURE INVESTMENT: | |||
| A total of $350m to fund various infrastructure upgrades to roads, hospitals, tourism and increased funding for the Economic and Business Growth Fund | Further details to be provided | Projects must be able to be started within a short period of time. Projects must also be labour intensive and/or require significant purchasing of local materials, services and supplies |
Further details can be found here:
Tasmania
| EFFECTIVE FROM | CONDITIONS | BCR ADVISORY COMMENT | |
| INTEREST FREE LOANS: | |||
| $20m will be allocated to providing loans to small business and $50m will be allocated to providing loans to local government. The loans will be interest free for three years | Further details to be provided | Small businesses with less than $5m turnover in the hospitality, tourism, seafood and export sectors, as well as local governments | |
| PAYROLL TAX: | |||
| Four month waiver of payroll tax | Immediate to 30 June 2020 | Hospitality, tourism and seafood businesses | Other businesses may apply for this concession, but only if they have less than $5m payroll and have been impacted by the virus |
Further details can be found here:
Northern Territory
| EFFECTIVE FROM | CONDITIONS | BCR ADVISORY COMMENT | |
| BUSINESS SUPPORT: | |||
| Eligible businesses will receive a one-off payment of $10,000. If a business puts in $10,000 of their own money, then the government will grant another $10,000. $20m has been allocated for this package. | Immediate | Must use money to improve a business in the Territory. The purchases must be made from another Territory business. | |
| $5m has been allocated to help businesses with adjusting to the conditions caused by the virus. | Immediate | All businesses can apply, but the hospitality sector will have first priority. Further details to come. | |
| $5m has been allocated to grant money for repairs, renovations and upgrades. The grant is up to $50,000. | Immediate | Must be an incorporated not-for-profit or a community organisation. If the organisation puts in their own money, it will be matched dollar for dollar up to $50,000. | The grant and dollar-matched grant can be added together for a total grant of up to $100,000. |
| FREEZING OF GOVERNMENT CHARGES: | |||
| All government fees and charges will be frozen. | Until 1 July 2021 | N/A | This includes electricity, water and car registration. |
| HOME IMPROVEMENT: | |||
| $30m of grants will be provided to Territory homeowners and landlords for home improvement. | Immediate | If the owner contributes $1,000 they will receive a $4,000 grant, if the owner contributes $2,000 they will receive a $6,000 grant. |
Further details can be found here:
Australian Capital Territory
| EFFECTIVE FROM | CONDITIONS | BCR ADVISORY COMMENT | |
| PAYROLL TAX WAIVER FOR 6 MONTHS | |||
| Businesses in the hospitality, creative arts and entertainment industries. | Covers waiver of payroll tax from April to September 2020
For monthly lodgers, first credit will be applied to the April 2020 liability. For annual lodgers, the credit will be applied at the end of the 2019-2020 financial year |
Business must be in the hospitality (cafes, pubs, hotels, clubs and restaurants), creative arts or entertainment industries.
Businesses will need to apply online at the ACT Revenue Office website at www.revenue.act.gov.au |
This should be a priority for all ACT businesses that qualify. The online application page is yet to be created at the time of writing. |
| PAYROLL TAX DEFERRAL | |||
| SME businesses can defer their 2020-21 payroll tax, interest free until 1 July 2022 | For monthly lodgers, deferral can be applied to the April 2020 liability.
For annual lodgers, deferral can be made to the full 2020-21 liability usually payable in July 2021 |
For grouped Australia wide payrolls up to $10m
Businesses will need to apply online at the ACT Revenue Office website at www.revenue.act.gov.au |
This should be a priority for all ACT businesses that qualify. The online application page is yet to be created at the time of writing. |
| COMMERCIAL GENERAL RATES REBATE | |||
| For commercial owners of property a rebate for fixed rates of $2,622 | The credit will be applied to the 2019-20 general rates, in fourth quarter | Commercial properties with an average unimproved land value (AUV) of less than $2 million | The rebate will be automatically applied. |
| ELECTRICITY REBATES | |||
| Small business owners with electricity usage may qualify for rebates of $750 | From June or July 2020 depending on the issue of the next electricity bill | Applies only to business they use less than 100 megawatts per year | The rebate will be automatically applied. |
| RIDESHARE AND TAXI VEHICLE LICENCE FEES | |||
| Licence fees will be waived for 12 months for rideshare operators.
Waiver of government leased taxi plate fees |
From 1 April 2020 | N/A | Fees will be waived automatically.
Cases where licences have already been prepaid 12 months in advance, an additional 12 months credit will be added to the licence at the next due date. |
| FOOD BUSINESS REGISTRATION, OUTDOOR DINING AND LIQUOR LICENCE FEES | |||
| 12 month waiver of food business registration and on-licence liquor fees for licensed venues | From 1 April 2020 | Waiver only applies to licensed venues | Cases where food business registration has been prepaid for more than one year in advance, an additional 12 months will be added to the licence. |
| Outdoor licence fees to be waived | For 2020-21 | Waiver only applies to licensed venues | Cases where food business registration has been prepaid for more than one year in advance, an additional 12 months will be added to the licence. |
| SUPPORT TO CLUBS | |||
| Additional payment of $1.5 million and freeing up the existing $1.8 million in the Clubs Diversification Fund | Details to be provided | Details to be provided | This is targeted at assisting clubs to retain their employees at existing award rates. |
| INFRASTRUCTURE SPENDING | |||
| $20 million to be immediately spent on infrastructure projects | Will have a focus on works that can start immediately | Spending for maintenance on local schools, roads, and public transport | This is targeted at keeping locals employed in public works. |
| FUNDING FOR ARTS SECTOR $500K | |||
| Funding for artists of up to $10,000 to support arts development and the sustainability of arts practice over the next six to nine months through a $500,000 grants program | Grant applications will open on 30 March 2020 and close at 5pm 17 April at 5pm. Announcements on successful recipients will be made around 1 May 2020 | Application must be made | Those in the arts sector should start their applications immediately. |
| SUPPORT FOR HOUSEHOLDS AND WELFARE AND OTHER AREAS | |||
| Various other support to be provided to households, targeted welfare groups and other areas. See link below for class=”section-heading” further details |
Further details can be found here:
Victoria
| EFFECTIVE FROM | CONDITIONS | BCR ADVISORY COMMENT | |
| PAYROLL TAX REFUNDS | |||
| Full payroll tax refunds for the 2019-20 financial year. | Immediate to 30 June 2020 | Immediate to 30 June 2020 For small and medium businesses with payroll of less than $3 million. | This assistance is a refund, not a loan. |
| PAYROLL TAX DEFERRAL | |||
| Payroll tax deferral for the first three months of the 2020/21 financial year. | 1 July 2020 | Payments can be deferred until 1 January 2021. | |
| COMMERCIAL TENANTS RENT RELIEF | |||
| Commercial tenants rent relief –
Commercial tenants in Government buildings can apply for rent relief. |
More details to come. | More details to come. | Private landlords are also being encouraged to undertake this measure. |
| 2020 LAND TAX PAYMENTS | |||
| 2020 land tax payments will be deferred for eligible small businesses. | More details to come. | More details to come. | |
| GOVERNMENT SUPPLIER INVOICE PAYMENTS | |||
| Government supplier invoices will be paid within five business days. | More details to come. | More details to come. | The private sector is urged to do the same, where possible. |
| LIQUOR LICENSE FEES | |||
| All liquor license fees will be waived for 2020. | More details to come. | More details to come. | This measure is for affected venues and small businesses. |
| BUSINESS SUPPORT FUND | |||
| A $500 million Business Support Fund will be established. | More details to come. | More details to come. | This fund will support the hardest hit sectors including hospitality, tourism, accommodation, arts and entertainment, and retail. |
| WORKING FOR VICTORIA FUND | |||
| A $500 million Working for Victoria Fund will be established. | More details to come. | More details to come. | This fund will help workers who have lost their jobs find new opportunities, including work cleaning infrastructure or delivering food. |
Download PDF
Source: Bentleys Chartered Accountants