Since 22 March 2020, the Federal Government has announced various coronavirus stimulus packages to help individuals and businesses that have been affected by the pandemic.

Here are some of the economic response to the coronavirus that the Federal Government has announced:

JobKeeper Payment

The Government announced a $130 billion JobKeeper Payment so that employers can keep their employees at their jobs.

Details Description
What is it?

Employers will receive a fortnight $1,500 payment before tax and paid for up to six months.

The employers must ensure that their employees are to be retained in their business during this period.

Who can take part?

Companies

Charities

Not-for-profit organizations

Partnerships

Trusts

Sole traders

What’s the eligibility?

Annual turnover is less than $1 billion and there’s a reduction in revenue of 30% or more since 1 March 2020 for a minimum of one month.

Eligible employees include full time, part time or stood down and even casual employees who have been with their current employer for at least 12 months.

Boosting cash flow for business

Details Description
What is it?

The government is providing tax-free cash flow boosts between $20,000 to $100,00 to help manage cash flow challenges and retain their employees.

The amount will be credited to their business account on 28 April 2020.

Once a business has lodged their activity statement, then the cash flow boost is automatically applied to their accounts.

Even if the cash flow boosts are tax-free, if the business has received more cash flow boosts than what it is entitled to, the excess has to be repaid.

Who can take part?

Small to medium sized businesses

Not-for-profit organizations

Sole traders

Partnerships

What’s the eligibility? The above businesses can apply, regardless of when they were registered.

Must have an active ABN on 12 March 2020.

The aggregated turnover is below $50 million compared to the previous year’s turnover.

Made eligible payments that business is required to withhold from. These payments include director’s fee, salary and wages, compensation payments, etc.

Either derived business income in 2018-19 and lodged 2019 tax returns on or before 2020 OR made GST taxable, GST-free or input taxed sales since July 20018 and lodged relevant activity statements on or before 12 March 2020.

Supporting apprentices and trainees

Details Description
What is it?

To help retain their trainees and apprentices, businesses can apply for a 50% wage subsidy for them during the 9 months from 1 January 2020 to 30 September 2020.

Employers can be reimbursed up to $21,000 per eligible apprentice or trainee, which is $7,000 per quarter.

Who can take part? Small businesses, including those using a Group Training Organisation, to help retain existing apprentices and trainees.
What is the eligibility?

Your business is employing less than 20 employees as trainees or apprentices.

The trainee or apprentice must have been in training since 1 March 2020.

Employers that re-engage an eligible out-of-trade trainee or apprentice can also apply.

If the businesses cannot retain their apprentices or trainees during this period, the wage subsidy will apply to the new hire.

Employers can register from early April 2020 and final claims for payments must be lodged by 31 December 2020.

Providing temporary relief for financially distressed business

Details Description
What is it?

This proposes amendments to be made to the Corporations Act 2001 to provide temporary relief for businesses in financial distress, so that business can continue during the current scenario.

It is a temporary provision that might last up to 6 months.

Who is it for? Businesses that are financially distressed due to COVID-19
What does it entail?

Temporarily increasing the minimum threshold for creditors to issue statutory demand on a company under the Corporations Act 2001 from $2,000 to $20,000 for 6 months.

The time the debtor has to respond to a bankruptcy notice has increased to 6 months from the current 21 days. This extension will provide debtors to consider repayment options before being forced into bankruptcy.

Directors will temporarily be relieved of personal liability for trading while insolvent. This will apply for six months. Debts incurred are still payable.

The Treasurer has temporary instrument-making power in the Corporations Act 2001 to make amendments to the provisions of the Act to provide relief from specific obligations or modify obligations to enable compliance. This will only apply for six months and any instrument made under this will apply for six months until the date it was made.

Increasing instant asset write-off

Details Description
What is it?

The instant asset write-off threshold will increase from $30,000 to $150,000.

This is applicable from 12 March 2020 to 30 June 2020.

This will help businesses to immediately deduct purchases from assets which costs less than $150,000.

What assets are applicable?

Either new or second hand assets installed or used during this period.

The threshold applies on a per asset basis, so you can write-off multiple assets immediately.

Who can take part? Businesses with turnover of less than $500 million (up from $50 million), until 30 June 2020.

Budget 2020: Full business write off for assets purchased and used before June 2022

Businesses will be able to write off the full value of new assets under the new measures presented in the 2020 federal budget.

This tax incentive will be available to 99% of all businesses, .i.e. those with turnover greater than $5 billion.

Eligible businesses are able to claim an immediate deduction of the full value of all new, eligible, depreciable assets of any value that are first used or installed before June 30, 2022 – subject to legislation passing parliament.

Treasurer Josh Frydenberg said the new measure builds on “the successful expansion of the instant asset write-off in our response to COVID-19” which is the $150,000 instant asset write-off scheme due to expire at the end of December.

As with everything to do with taxes, please seek qualified financial advice from a financial advisor or accountant.

Backing business investment

Details Description
What is it?

The Government is introducing a 15 month incentive by accelerating depreciation deductions. This will support business investment and economic growth over the short term.

The business can deduct 50% of the cost of an eligible asset on installation.

What assets are applicable?

Eligible assets include new assets that can be depreciated under Division 40 of the Income Tax Assessment 1997 acquired after the announcement of and that were used and installed by 30 June 2021.

It does not apply to second hand Division 40 assets or buildings and other capital works depreciable under Division 43.

Who is eligible? The business has an aggregated turnover of less than $500 million.

SME guarantee scheme

Details Description
What is it?

The Coronavirus SME Guarantee Scheme that will help small and medium enterprises to get access to working capital.

The scheme is aimed at supporting up to $40 billion of lending to SMEs.

The Government will guarantee 50% of new loans issued by eligible bank and non-bank lenders to SMEs.

Who can take part? SMEs including sole traders and not-for-profit organizations.
What is the eligibility criteria?

A turnover of up to $50 million in the previous financial year (or likely to be less than $50 million in current financial year).

The maximum loan size is $250,000 per borrower.

The loan term is for 3 years. There will be an initial six month repayment holiday.

Finance is unsecured, so the borrower does not have to provide any asset as security to get approved for the loan.

Which lenders are participating?
  • ANZ
  • Bankwest
  • Bendigo and Adelaide Bank
  • Commonwealth Bank
  • NAB
  • Suncorp

There are lenders that are still pending approval.

The government announced that the Coronavirus SME Guarantee Scheme is extended to 30 June 2021. The second phase of the scheme will come into effect from 1 October 2020 and the loan size will increase to $1 million.

Early release of superannuation for sole traders

Details Description
What is it?

Sole traders can access up to $20,000 in their superannuation.

They can access their superannuation of up to $10,000 before 1 July 2020, and a further $10,000 from 1 July 2020 until 24 September 2020.

You do not have to pay tax on the amounts released.

Who is eligible? A sole trader whose business was suspended or your turnover was reduced by 20% or more on or after 1 January 2020.
When to apply? You can apply for the early release of superannuation from 20 April 2020.

State governments’ COVID-19 stimulus packages

These packages were announced to help households and businesses affected by the coronavirus.

New South Wales

  • A $1 billion Working for NSW fund to sustain business, create new jobs or retrain employees.
  • Small and medium businesses can have payroll tax deferral arrangements for six months if the total wages for 2019-20 is more than $10 million.
  • If total wages for 2019-20 is less than $10 million, annual tax liability is reduced by 25% when lodging reconciliation due on 28 July 2020.
  • Furthermore, no payment is required for March, April or May of payrolls that are $10 million or less.
  • The payroll tax threshold for all businesses has increased from $900,000 to $1 million as of 1 July 2020.
  • $80 million allocated to waive fees and charges for small businesses like cafes, bars, restaurants, etc.
  • Deferral of duty on lotteries and Keno for 6 months, including payments due from April 2020 to September 2020.
  • Deferral of parking space levy for 6 months.
  • Deferral of rent for six months for commercial and not-for-profit tenants with less than 20 employees.

These updates are as of 27 March 2020. To keep stay on top of latest updates, please visit the NSW Treasury website.

Victoria

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On 13 September 2020, Victoria’s government announced its $3 billion Business Resilience Package

On 13 September 2020, the Victorian government announced that it was investing $3 billion in cash grants, tax relief and support the cash flow of businesses that were affected by the ongoing restrictions.

These grants are available for business support:

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