The Federal Government has announced stage 2 of its economic plan to cushion the economic impact of the coronavirus (COVID-19) and help build a bridge to recovery.
Financial support for businesses
- Establishing the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SMEs) to get access to working capital to help get them through the impact of the COVID-19 – Government will guarantee 50% of new loans issued by eligible lenders to SMEs
- Up to $715 million in support for the aviation industry.
Temporary relief for financially distressed businesses
- Temporarily increasing the threshold at which creditors can issue a statutory demand on a company and to initiate bankruptcy proceedings against an individual
- Increasing the time companies and individuals have to respond to statutory demands they receive
- Temporary relief for directors from any personal liability for trading while insolvent and providing temporary flexibility in the Corporations Act 2001 to provide targeted relief from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health virus.
Boosting cashflow from employers
- Further enhancing the payment to eligible small and medium sized employers, the payment will now be a minimum of $20,000 up to $100,000 and extended to eligible not-for-profits (including charities).
- Small and medium sized business entities and not-for-profits with aggregated annual turnover under $50 million turnover that employ workers will be eligible for the payments
- Payments will be linked to employee PAYG withholdings (payment will equal to 100% of salary and wages withheld, minimum from $2,000 to a maximum $50,000)
- The payment will be available from 28 April 2020, is tax-free and will flow automatically through the ATO
- An additional payment equal to the first payment will be made from 28 July 2020.
To support workers and households
- Temporarily expanding eligibility to income support payments and establishing a new time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight for the next 6 months – to be paid to both existing and new recipients of the Jobseeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit
- In addition to the previous $750 payment announced, there will be a further $750 payment to social security and veteran income support recipients and eligible concession card holders except for those who are receiving an income support payment that is eligible to receive the Coronavirus supplement. This second payment will be made automatically from 13 July 2020. First payment will be made from 31 March 2020.
- Early release of superannuation of up to $10,000 to individuals in financial stress as a result of COVID-19. Eligible individuals can apply online through myGov before 1 July 2020 and the amounts released will not be taxable and will not affect Centrelink or Veterans’ Affairs payments
- Temporarily reduce superannuation minimum drawdown rates for account based pensions and similar products by 50% for 2019-20 and 2020-21.
- Reduce social security deeming rates.
A package of Bills implementing the Government’s economic stimulus package will be introduced into Parliament on 23 March 2020 for urgent consideration. More information is on the Treasury website which includes a handy factsheet outlining the economic response to-date.
Tax relief for eligible businesses
The Victorian Government has also announced tax measures to support businesses through Victoria’s State of Emergency, as part of a broader economic survival package in response to COVID-19.
Payroll tax waived
Businesses with annual taxable wages up to $3 million will have their payroll tax for the 2019-20 financial year waived.
Eligible businesses must continue to lodge returns but do not need to make further payments for this financial year.
The State Revenue Office will directly contact eligible businesses in relation to reimbursement for payroll tax already paid in the financial year.
These businesses can also defer paying payroll tax for the first quarter of the 2020-21 financial year.
More information about the administration of these relief measures will be sent directly to eligible businesses.
Liquor licence fees waived
Businesses that have paid for a renewable liquor licence for 2020 will be reimbursed their licence fee and those yet to pay will have the fee waived.
The State Revenue Office will administer the reimbursement, regardless of whether the licence fee was paid to it or the Victorian Commission for Gaming and Liquor Regulation.
Land tax deferral
Land owners due to pay 2020 land tax that have at least one non-residential property and total taxable landholdings below $1 million have the option of deferring their 2020 land tax payment until after 31 December 2020.
The State Revenue Office will contact all taxpayers who are eligible for this deferral.