GOVERNMENT SUPPORT PACKAGES
In March, both the Federal and Queensland Governments announced multi-billion-dollar economic packages to support households and businesses address the significant economic consequences of the COVID-19 pandemic.
Federal Government support package
If your business has been significantly impacted by COVID-19 you will be able to access the $130 billion JobKeeper payment to continue paying your employees. Under the JobKeeper program, you will be able to claim a fortnightly payment of $1500 per eligible employee from 30 March 2020, for a maximum of six months.
Over the next six months, the Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited COVID-19 supplement to be paid at a rate of $550 per fortnight. This will be paid to both existing and new recipients of JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
The Government is allowing individuals affected by COVID-19 to access up to $10,000 of their superannuation in 2019/20 and a further $10,000 in 2020/21. Individuals will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
Through the Boosting Cash Flow for Employers the Government is providing up to $100,000 to eligible small and medium-sized businesses, and not for-profits (NFPs) that employ people, with a minimum payment of $20,000. These payments will help businesses and NFPs with their cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.
The Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive. The package also includes temporary relief for directors from any personal liability for trading while insolvent, and providing temporary flexibility in the Corporations Act 2001 to provide temporary and targeted relief from provisions of the Act to deal with unforeseen events that arise as a result of the COVID-19 health crisis.
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.
The Government is supporting small business to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for nine 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. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7000 per quarter).
The Government, the Reserve Bank of Australia and the Australian Prudential Regulation Authority have taken coordinated action to ensure the flow of credit in the Australian economy.
Under the Coronavirus SME Guarantee Scheme, the Government will provide a guarantee of 50 per cent to SME lenders to support new short-term unsecured loans to SMEs. The Scheme will guarantee up to $40 billion of new lending. This will provide businesses with funding to meet cash flow needs, by further enhancing lenders’ willingness and ability to provide credit. This will assist otherwise viable businesses across the economy who are facing significant challenges due to disrupted cash flow to meet existing obligations.
View the Australian Government’s full Economic Response: www.treasury.gov.au/coronavirus
Queensland Government support package
Immediate payroll tax refunds will be provided for COVID-19 affected businesses. Eligible businesses can also apply for deferral until the end of 2020 and a payroll tax holiday for three months.
Market Diversification and Resilience Grants (MDRG) for projects up to $50,000 are available to support project activities such as market evaluation studies, staff training, and new equipment. Under the MDRG program equipment purchase grants of up to $7500 are available to support new equipment purchases up to a maximum cost of $10,000. Both programs come with a co-investment component.
A new $500 million concessional loan facility, administered by QRIDA that will comprise low interest loans of up to $250,000 for carry on finance with an initial 12-month interest free period for businesses to retain staff.
Sole traders, small and medium businesses will get a $500 rebate on their power bill. Any business consuming less than 100,000 kilowatt hours will receive the rebate, which will be automatically applied on business electricity bills.
Up to $500 million will be spent to assist workers who lose their job or income with retraining, job-matching and other help to transition into jobs in the industries that are vital to get Queensland through this crisis – such as health care, agriculture, food production, transport, cleaning and mining. Businesses that need access to skilled labour to meet demand will also receive assistance under this initiative.
SMEs can access financial counsellors to get a better understanding of their financial position and viability and gain assistance in developing and implementing plans to improve their financial situation. TAFE Queensland is also offering webinars to help businesses identify risks, build financial skills and plan to mitigate the impact of COVID-19.
The Mentoring for Growth program has mentors ready to provide tailored support to impacted small businesses, including financial mentoring and business planning.
In addition to the above economic package, the Queensland Government announced a $20 million extension to the Primary Industry Productivity Enhancement Scheme (PIPES) administered by QRIDA. Under PIPES primary producers can access Sustainability Loans of up to $1.3 million and First Start Loans of up to $2 million.
View the Queensland Government’s full Immediate Industry Recovery Package: www.qld.gov.au/about/industry-recovery