A rundown on how you might get the help you need to keep your business afloat
Coronavirus has brought about huge job losses and as many businesses forced to shut. These are events unparalleled since the great depression.
Governments at state, territory and federal level throughout Australia have launched a series of stimulus/survival packages hoping to mitigate as much business and community loss as possible.
Here’s a small sample of what’s been done, how it impacts you as an employee or business owner on a state-by-state basis, and what options you can take to keep your businesses afloat.
The federal government has passed a $130 billion JobKeeper package. To be eligible, a business with a turnover of less than $1 billion needs to demonstrate a 30% reduction in turnover for at least a month. Employees need to have been a full-time, part-time or a casual employee for at least 12 months to 1 March 2020 in order that they can receive the payment.
Rent relief (for businesses)
There have also been a range of measures to help commercial renters. This includes a hold over the next six months on evictions for tenants under financial stress. This is applicable to SMEs with an annual turnover of up to $50 million. Banks and other financial institutions are expected to support landlords and tenants by being as flexible as is appropriate.
Temporary cash flow support will be provided to SMEs who employ staff during the economic downturn. Done through two sets of cash flow boosts delivered from 28 April 2020, businesses will be eligible if they held (and still hold) an ABN on 12 March 2020, have an aggregated annual turnover under $50 million (generally based on prior year turnover), and as long as they made eligible payments they are required to withhold from (even if the amount needed to withhold is zero). There are other eligibility criteria, which can be found on the government’s Business website.
There are different payroll tax supports available, on a state-by-state basis. Here’s the rundown.
- If your business has a payroll of up to $10m, you will have payroll tax waived for three months and a three-month deferral on payroll tax. Payroll tax for businesses with payrolls over $10m will be deferred for six months. It will also be cut by raising the threshold limit to $1m
- Small and medium-sized businesses with payroll of less than $3m will be entitled to full payroll tax refunds for the 2019-20 financial year
- Small and medium-sized businesses can defer payroll tax for the first quarter of the 2020-21 financial year until 1 January 2021
- Your payroll tax can be refunded for two months, or deferred for three months, or the entire calendar year
- A six-month payroll tax waiver will be available for all businesses with an annual payroll of up to $4m
- A waiver of 2019-20 payroll tax for Australian wages (and Australian Group wages) of up to $5 million annually
- A waiver of 2019-20 payroll tax for the Hospitality, Tourism, and Seafood industries
- A payroll tax twelve-month rebate will be available for new youth employees (aged 24 years and under)
- There will be a one-off payroll tax grant of $17,500 for businesses with a turnover between $1m and $4m
- Small and medium-sized businesses affected by Covid-19 can apply to defer payroll tax until 21 July 2020
- All businesses whose operations are directly affected by the prohibited activities listsuch as gyms and indoor sporting venues, cinemas, beauty therapists and nail salons will be eligible to receive a six-month waiver of payroll tax from April to September 2020. All businesses with Australia-wide wages of up to $10 million can defer their 2020-21 payroll tax, interest free until 1 July 2022.
- Smaller and medium businesses in the NT who can show they have been hurt by the coronavirus will have their payroll tax completely abolished for the next six months.
SMEs with a turnover of up to $50 million will be eligible to receive loans as part of the Coronavirus SME Guarantee Scheme. The Government will provide a guarantee of 50 per cent to SME lenders for new unsecured loans to be used for working capital. With a maximum total size of loans of $250,000 per borrower, the loans will be for up to three years, with an initial six-month repayment holiday. These loans will be made in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan
The economic stimulus thus far has been delivered in phases, so your best bet is to keep informed about what changes are brought about, and how you might benefit from them.