COVID-19 Financial Support for Business

Monday 23 March 2020

COVID-19 - FINANCIAL SUPPORT FOR BUSINESSES - SUMMARY FOR MEMBERS 23/03/20

Over the last fortnight the Federal Government has announced two major economic stimulus packages designed to assist businesses manage cash flow, retain employees and ensure individuals are kept well-informed of options available to them.

Below is a number of measures for businesses that may be relevant to our members. They include:
  1. Wage Subsidy (for businesses w/ less than $50m turnover and NFP charities)
  2. Loan Guarantees (for businesses w/ less than $50m turnover and NFP charities)
  3. Increasing Asset Write Off (for businesses w/ less than $500m turnover and NFP charities)
  4. Other Initiatives
A full overview of the Federal Government’s Economic Response to Coronavirus can be found here.

  1. Wage Subsidy (for businesses w/ less than $50m turnover and NFP charities)
    1. The latest package increases the previously announced wage subsidy to small business from a $25K cash refund to a maximum payment of $100K.
    2. The tax-free payment is worth 100% of the tax that small and medium-sized businesses withhold from their employees' salary and wages up to a maximum amount of $100,000.
    3. The payment will be delivered as an automatic credit in the activity statement system from 28 April 2020 upon employers lodging eligible upcoming activity statements.
    4. Eligible businesses that pay salary and wages will receive a minimum payment of $20K, even if they are not required to withhold tax
    5. More information: Government’s Cash Flow for Business Fact Sheet and ATO Updates
  2. Loan Guarantees (for businesses w/ less than $50m turnover and NFP charities)
    1. The Government has also announced a new “coronavirus SME guarantee scheme” which will support lending to small and medium-sized businesses
    2. Under the plan, the Federal Government will guarantee 50% of an eligible loan through participating banks and non-bank lenders to businesses disrupted by the virus.
    3. Loans will be used for working capital purposes and be unsecured. Grants will start 1st April 2020.
    4. Lenders will not be charged a fee for accessing the guarantee scheme. Loans will be repayment-free for six months.
  3. Increasing Instant Asset Write-Off (for businesses w/ less than $500m turnover)
    1. To encourage businesses to keep spending, the government has announced it is increasing the instant asset write-off, by lifting the threshold to $150,000 (from $30,000)
    2. Eligibility for this incentive has been expanded - up from businesses with less than $50m to now include businesses with aggregated annual turnover of less than $500 million.
    3. It will also introduce a time-limited 15 month incentive to invest, by accelerating depreciation deductions.
  4. Other Initiatives
    In addition to the above, we recommend businesses and employers consider the following:
    • Rental Fees - We recommend all agencies speak with landlords regarding an immediate rent reduction or holiday period if possible. Don’t wait until it’s urgent. Get on the front foot.
    • Speak with your bank - All major banks have announced special arrangements for business and personal customers. Speak with them about how you might negotiate any ongoing arrangements.
    • Employee Assistance - We recognise the current situation will require many businesses to restructure how they operate. Given this, we urge employers to ensure they are up-to-date with assistance available to individuals and can help their staff navigate the way forward.
We’re conscious this situation is constantly evolving, and will seek to continue to update members with information relevant to you and your industry as it is announced.

A link to other resources related to Coronavirus can be found in our resources section.

Thank you,

The Communications Council team.



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