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COVID-19 stimulus package summary

March 31, 2020

Updated 31 March 2020 

Social Traders has summarised Federal and State Government stimulus packages that may have relevance for social enterprisesThe packages are focussed on maintaining jobs & tax relief, although there are other initiatives such as new debt mechanisms and funds that may be relevant for social enterprises. Also included are links to useful non-financial forms of assistance e.g. templates for rent relief request letters and business continuation plans. 

 Please note this list may not be comprehensive as there is new stimulus being announced regularly and we have not included most personal or household packages. While we have indicated what we think the highlights are, you should always seek financial advice to assist you in determining the best route to these packages. 

This list will be updated as new stimulus announcements are made.

Australian Government

$130b jobkeeper payment to keep Australians in a job 

This is a highlight for social enterprises. Eligible employers include not-for-profits/ charities, companies, partnerships, trusts and sole traders – with an annual turnover of less than $1 billion who self-assess that they have had a reduction in revenue of 30% or more, since 1 March 2020 over a minimum one-month period. Eligible employees include FT/PT stood down employees, and casual employees who have been with their employer for at least 12 months.   

Employers will receive a payment of $1,500 (before tax) per fortnight for eligible employees. The payment will be paid to employers, for up to six months, for each eligible employee that was on their books on 1 March 2020 and is retained or continues to be engaged by that employer. For employees who have been stood down, they will need to reengage with the business. The first payments will be made in the first week of May (and back dated to the 1 March) from the Australian Taxation Office.  

Boosting cash flow for employers

Another highlight for social enterprises. 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. 

Eligible businesses with a turnover of less than $50 million that employ staff will receive a payment equal to 100% of their PAYG withheld, delivered as a credit in their BAS, with a minimum $10,000 payment and up to $50,000.The first payment will be available from 28 April 2020. 

Also, eligible entities will receive an additional payment equal to the total of all the Boosting Cash Flow for Employers payments received. These payments will be from 28 July 2020. 

Increasing the instant asset write-off

For assets first used or installed ready for use from 12 March until 30 June 2020, the Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. 

Unfortunately, if you operate as a not-for-profit you aren’t paying tax, so this usually wouldn’t apply. For private companies if you have significant capital assets you can claim the cost of the capital assets as an immediate tax deduction. 

Backing business investment

This package, similar to the instant asset write-off is not relevant for most not-for-profits. Government is introducing a time limited 15 month investment incentive (12 March to 30 June 2021), through accelerated depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. 

Supporting apprentices and trainees

Eligible employers can apply for a wage subsidy of 50 per cent of an apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice. 

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% of new loans issued by eligible bank and non-bank lenders to SMEs. 

If a social enterprise is in position to take on debt (perhaps you are inundated with new business)they’ll likely be working with a bank or lender to submit a proposal and undergo due diligence process. 

Providing temporary relief for financially distressed businesses

  • The Government is proposing increasing the threshold at which a creditor can issue an insolvency or bankruptcy statutory demand on a company to $20,000 (currently as low as $2,000) and companies will be allowed six months to respond compared with the current 21 days. 
  • The package also includes some temporary relief for directors from any personal liability for trading while insolvent during the coronavirus crisis. 
  • The Government expects and accepts that companies will not be able to comply with the Corporations Act in such ways as holding general meetings. For the next six months, the Treasurer will be granted temporary powers to deal with these issues as they arise.

ATO relief – options available to assist businesses impacted by COVID-19

This relief is useful if you’re experiencing cash-flow challenges.

  • Deferring by up to 4 months the payment date of amounts due through BAS (including PAYG instalments), income tax assessments, FBT assessments and excise 
  • Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to 
  • Allowing businesses to vary PAYG instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters 
  • Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities 
  • Allowing affected businesses to enter into low-interest payment plans for their existing and ongoing tax liabilities. 

The ATO assistance is not automatic, taxpayers must first contact the ATO to request assistance, and if eligible, the ATO will tailor the assistance package for the relevant taxpayer. 

Victoria

  • Almost $6 million will be provided to Victorian homelessness organisations to help protect Victorians at risk of or experiencing homelessness because of the COVID-19 virus and manage any outbreaks. 
  • Full payroll tax refunds for the 2019-20 financial year to small and medium-sized businesses with payroll of less than $3 million. 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. 
  • The Victorian Government Business Support Fund is now distributing $10,000 grants to eligible small businesses impacted by COVID-19 and is open for applications 
  • The Government will establish a $500 million Working for Victoria Fund in consultation with the Victorian Council of Social Services and Victorian Trades Hall Council. If you’re a social enterprise assisting job seekers, the fund will help workers who have lost their jobs find new opportunities, including work cleaning public infrastructure or delivering food – providing vital contributions to our state’s response to the pandemic and affording those Victorians security when its needed mosthttps://www.vic.gov.au/workingforvictoria 

Many social enterprises are likely to qualify for Victorian Government Business Support Fund grants. Eligibility criteria and information on how to apply can be found at: https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/business-support-fund 

New South Wales

  • $450 million for the waiver of payroll tax for businesses with payrolls of up to $10 million for six months (the rest of 2019-20). 
  • Payroll Tax – deferral of payroll tax for business with payrolls over $10 million for six months. 
  • $56 million to bring forward the next round of payroll tax cuts by raising the threshold limit to $1 million in 2020-21. 
  • $80 million to waive a range of fees and charges for small businesses including bars, cafes, restaurants and tradies. 
  • $250 million to employ additional cleaners of public infrastructure such as transport assets, schools and other public buildings. 
  • More than $250 million to bring forward maintenance on public assets including social housing and crown land fencing. 
  • Creation of a $1 billion Working for NSW fund to sustain business, create new jobs and retrain employees. 
  • Deferral of rents for six months for commercial tenants with less than 20 employees in all Government-owned properties. 
  • $34 million boost in funding to prevent homelessness. 
  • $10 million to support charities 

Queensland

  • Payroll Tax refund for two months’ worth of payroll tax for small and medium businesses and large businesses specifically impacted. Additionally, for small and medium businesses a three-month payroll tax holiday, and a twelve-month payroll tax payment deferral for any of these Queensland businesses. 
  • Liquor licencing fees waived for venues that have had to close their doors, providing rent relief for businesses who rent premises from the state government and giving sole traders, small and medium businesses a $500 rebate on their power bill for this year. 
  • $500 million concessional loan facility comprising loans of up to $250,000 with an initial 12 month interest free period for businesses to retain staff. 
  • $8 million in funding relief for arts organisations through Arts Queensland. 

If a social enterprise is in position to take on debt (perhaps you are inundated with new business), they’ll likely be working with a bank or lender to submit a proposal and undergo a due diligence process. 

South Australia

  • $300m Business and Jobs Support Fund will be used to directly assist individual businesses and industry sectors facing potential collapse and the loss of thousands of jobsFor more information, and how to apply to the Funds, email: BusinessandJobsSupportFund@sa.gov.au ;  CommunityandJobsSupportFund@sa.gov.au 
  • $250m Community and Jobs Support Fund – Community organisations, such as sporting, arts and recreational bodies, non-profit organisations and some other industry sectors will be assisted. 
  • 6-month waiver for all businesses with an annual payroll (grouped) up to $4 million, eligible businesses won’t have to pay any payroll tax from April to September. 
  • Employers with grouped annual wages above $4 million able to defer payroll tax payments for 6 months on demonstration of significant impacts on cash flow of coronavirus. 

Australian Capital Territory

  • A six month waiver on payroll tax for hospitality, creative arts and entertainment industries, the waiving of fees for food business registration and liquor licensing fees (excluding off-license) and outdoor dining fees and a $750 rebate for small business owners to help with power bills. 
  • Interest free deferrals of payroll tax commencing 1 July 2020 for all businesses up to a payroll threshold of $10 millionSmall businesses are already exempt from payroll tax due to the highest tax free threshold ($2m) in Australia. 
  • Additional funding of $7 million for non-government organisation partners to meet increased service demand for emergency relief will also be rolled out as part of the ACT Government Community Support package. 
  • A new $500,000 round of grants funding for the arts sector. 
  • A rebate on the fixed charge for 2019-20 on commercial rates for properties with an AUV below $2 millionwhich particularly targets businesses who own their own premises. 

Western Australia

  • $607 million stimulus package to support WA households and small businesses in the wake of COVID-19. 
  • $402 million in the 2020-21 Budget to freeze household fees and charges, including electricity, water, motor vehicle charges, the emergency services levy and public transport fares. 
  • $91 million allocated to double the Energy Assistance Package (EAP) in 2020-21. The payment will increase from $300 to $600 for eligible concession card-holders. 
  • $114m payroll tax relief. Businesses with a payroll between $1 million and $4 million will receive a one-off grant of $17,500, 
  • $1 million payroll tax threshold brought forward by six months to July 1, 2020, 
  • Small and medium sized businesses affected by COVID-19 can apply to defer payment of their 2019-20 payroll tax until July 21, 2020. 
  • Small Business Development Corporation’s refocused 133 140 hotline number and website http://www.smallbusiness.wa.gov.au will deal specifically with queries from business owners looking to navigate the wide range of recently announced Federal and State government measures to alleviate the impacts of COVID-19. 

Tasmania

  • $20 million for the provision of interest free loans to businesses in the hospitality, tourism, seafood and exports sectors. The loans will be available to small businesses with a turnover of less than $5 million for the purpose of purchasing equipment or restructuring business operations and will be interest free for a period of up to three years. 
  • Employers in the Hospitality, Tourism, and Seafood industries will not be required to lodge payroll tax returns for March, April and May 2020. 
  • Other small to medium businesses with an annual payroll of up to $5 million in Australian wages will be able to apply, based on the immediate impact of the virus on their businesses, to not lodge payroll tax returns for the three months March, April and May 2020. 
  • Youth employment payroll tax rebate scheme for people aged 24 years and under, for one year from 1 April 2020. 
  • $2.1 million for one-off $5,000 grants for businesses that hire an apprentice or trainee, complementing the Federal Government’s apprenticeship package.
  • An additional $1 million in grants to mental health organisations to support individuals experiencing mental health difficulties as a result of the challenges associated with the COVID-19 pandemic. 
  • Increase the Small Business Interest Free Loan Scheme from $20 million to $50 million which is now available for businesses with turnovers less than $10 million. 
  • Provide a new $40 million Small Business Grants Program with $20 million set aside for an emergency grants program of $2500 cash payments. 
  • Provide a Digital Ready for Business Program, to assist businesses take their business online. 
  • Provide Business Continuity Advice with $750,000 in funding made available for businesses to seek cash flow and continuity advice, including a $50,000 grant to Small Business Council of Tasmania. A further $200,000 will be provided to the THA to provide business continuity and cash flow advice, and $200,000 will be provided to Rural Business Tasmania for the extension of its Rural Financial Counselling service. 
  • The Government will provide $1.5 million to support the Creative and Cultural Industries.   
  • $5 million funding to enable NGOs to support vulnerable people through the provision of food hampers, medical supplies or counselling 
  • The payroll tax waivers for the hospitality, tourism and seafood sectors, and for Tasmanian businesses with payrolls less $5 million announced in the first Tasmanian Stimulus Package, will be extended to ensure that these industries pay no payroll tax for the entire 2019-20 year. This will include refunds and waivers to provide cash where it is required now.

Northern Territory

  • $60 million stimulus package to protect Territorians from the deep economic impacts of the coronavirus pandemic. 
  • The NT Government has expanded Home Improvement Scheme, where all Territory homeowners will receive $6000 to undertake renovations and improvements to their property by a local business or tradie. People will need to put in $2000 to receive the additional $6000 or alternatively they can put in $1000 and receive $4000. 
  • The stimulus package will give eligible businesses $10,000 for upgrades as a part of a new Business Improvement Scheme aimed at helping businesses attract more customers. If a business also wants to contribute its own $10,000, the government will pitch in an additional $10,000 for a total of $30,000. 
  • $5 million Business Structural Adjustment package assisting businesses who need to adjust to the 100 person rule or to establish or upgrade their online presence to adjust to changing behaviours of consumption. 
  • $5 million Immediate Works Grants Package. This package reintroduces the Immediate Works Grant for incorporated not-for-profit and community organisations – including clubs – to undertake repairs, renovations and upgrades to their premises/facilities. Applicants can apply for grants of up to $50,000, which will then be matched dollar-for-dollar if the organisation also puts in their own $50,000. Up to $200,000 on a dollar-for-dollar matching basis for amounts above $100,000 
  • $50 million Small Business Survival Fund to help small businesses survive the physical distancing requirements. 
  • All agencies have been directed to be responsive and flexible to requests including the fast tracking of procurement decisions wherever possible. 

Non-financial assistance

For your social enterprise: 

These links provide some general advice for small business of which many social enterprises are. There are lots of useful templates you can use e.g. templates for rent relief request letters and business continuation plans. 

https://www.smallbusiness.nsw.gov.au/get-help/covid-19-coronavirus-information-small-business-owners
http://rca.asn.au/rca/coronavirus-information-hub/
https://www.victorianchamber.com.au/business-support/crisis-information/covid-19-coronavirus-resources  

For your staff: 

The federal government has announced several initiatives including support for mental health services, which may be relevant for your staff who have expressed employment related distress. https://www.pm.gov.au/media/11-billion-support-more-mental-health-medicare-and-domestic-violence-services-0 

In particular the following sources of support may be useful: 

  • Head to Health – The Government’s digital mental health portal which provides links to trusted Australian online and phone supports, resources and treatment options. 
  • Beyond Blue – dedicated coronavirus wellbeing support line is currently being developed. Existing phone and webchat support services are still available. 
  • Lifeline – phone, text and webchat support. 
  • Kids Helpline – phone, webchat or email support service for children. 

Related links

Australian Government 
https://treasury.gov.au/coronavirus
https://www.pm.gov.au/media/supporting-australian-workers-and-business 

ATO 
https://www.ato.gov.au/Media-centre/Media-releases/Support-measures-to-assist-those-affected-by-COVID-19/  

VIC
https://www.premier.vic.gov.au/more-homelessness-and-public-housing-support-in-covid-19-fight/
https://www.business.vic.gov.au/disputes-disasters-and-succession-planning/illness-and-business-management-plan/coronavirus-business-support
https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/business-support-fund 

NSW 
https://www.nsw.gov.au/news-and-events/news/health-boost-and-economic-stimulus/
https://www.nsw.gov.au/your-government/the-premier/media-releases-from-the-premier/billions-in-tax-relief-for-business-1-billion-fund-for-jobs-and-help-for-the-vulnerable/ 

QLD
https://www.qld.gov.au/about/industry-recovery/business-and-industry-support
http://statements.qld.gov.au/Statement/2020/3/24/palaszczuk-government-unveils-4-billion-package-to-support-health-jobs-households-and-queensland-businesses 

SA
https://www.premier.sa.gov.au/news/media-releases/news/unprecedented-response-and-economic-stimulus-to-drive-sa-jobs,-economy-in-wake-of-bushfires,-coronavirus2
https://www.premier.sa.gov.au/news/media-releases/news/local-communities-set-to-benefit-from-$350-million-stimulus
https://www.premier.sa.gov.au/news/media-releases/news/$1-billion-stimulus-package-to-save-sa-jobs,-businesses 

ACT
https://www.cmtedd.act.gov.au/open_government/inform/act_government_media_releases/barr/2020/initial-economic-survival-package-to-support-territory-economy 

WA
https://www.wa.gov.au/organisation/department-of-the-premier-and-cabinet/coronavirus-covid-19-western-australian-government-response 

TAS
http://www.premier.tas.gov.au/releases/ministerial_statement_covid-19_response_measures
https://www.sro.tas.gov.au/Documents/Coronavirus%20payroll%20tax%20measures%20factsheet.pdf http://www.premier.tas.gov.au/releases/unprecedented_new_social_and_economic_support_package_released 

NT
http://newsroom.nt.gov.au/mediaRelease/32101
https://business.nt.gov.au/recovery/small-business-survival-fund
https://nt.gov.au/news/2020/economic-stimulus 

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