The Government has set aside $1 billion to support regions most significantly affected by the Coronavirus outbreak. These funds will be available to assist during the outbreak and the recovery. In addition, the Government is assisting our airline industry by providing relief from a number of taxes and Government charges estimated to total up to $715 million.
To support small businesses to retain their apprentices and trainees, eligible businesses can apply for a wage subsidy of 50 per cent of the apprentice's, or trainee's wage paid during the 9 months from 1 January 2020 to 30 September 2020. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
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. In 2017-18 there were more than 360,000 businesses that benefited from the current instant asset write-off, claiming deductions to the value of over $4 billion.
The Government is providing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions.
The economic impacts of the Coronavirus and health measures to prevent its spread could see many otherwise profitable and viable businesses temporarily face financial distress. It is important that these businesses have a safety net to make sure that when the crisis has passed they can resume normal business operations. One element of that safety net is to lessen the threat of actions that could unnecessarily push them into insolvency and force the winding up of the business.
The Government is providing temporary cash flow support of up to $100,000 for eligible small and medium-sized businesses, and not-for-profits (NFPs) that employ staff to help with their cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff. This will be done through two sets of cash flow boosts, with the first delivered from 28 April 2020, through credits in the activity statement system. Eligible businesses do not need to apply with a separate form.
The Australian Government is supporting Australian businesses to manage cash flow challenges and retain employees. Assistance includes cash flow support to businesses and temporary measures to provide relief for financially distressed businesses.
The Government is providing vital support to sole traders to withstand the economic impacts of the Coronavirus.
Jobkeeper update relating to "Employees employed through a special purpose entity, rather than an operating entity", "Charities and the treatment of government revenue", "Religious practitioners", "'One in, all in' principle", "Full time students aged 16 and 17 years old", "International Aid Organisations" and "Universities".
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. Timely access to credit is vital for businesses to manage the impacts of the Coronavirus.
Temporarily reducing superannuation minimum drawdown rates: The Government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for 2019-20 and 2020-21. This measure will benefit retirees holding these products by reducing the need to sell investment assets to fund minimum drawdown requirements.
Reducing social security deeming rates: On 12 March, the Government announced a 0.5 percentage point reduction in both the upper and lower social security deeming rates. The Government will now reduce these rates by another 0.25 percentage points.
The Government is providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders. The first payment will be made from 31 March 2020 and the second payment will be made from 13 July 2020. Around half of those that benefit are pensioners. This payment will help to support confidence and domestic demand in the economy. The second payment will not be made to those eligible for the Coronavirus supplement.
Over the next six months, the Government is 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. This will be paid to both existing and new recipients of JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
Individuals affected by the coronavirus can access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. You will be able to apply for early release of your superannuation from 20 April 2020.
In response to the COVID-19 pandemic and its significant impact on local businesses, industry sectors and jobs, the South Australian Government has announced a second economic stimulus package - the Jobs Rescue Package, worth $650 million - that will provide immediate financial support and relief to those most affected.
COVID-19 may well change the world; however, right now small business owners are focussed on navigating the immediate issues: cashflow uncertainty, fear, and the welfare of their workforce and customers. Small business has always been practical and pragmatic, robust and resilient. Embedded in their communities, they are first and hardest hit when economies tank, natural disasters strike, or governments change the rules.
Individuals and Directors or Owners of a Small to Medium Enterprise (SME) that are struggling with unmanageable debts should get professional help to manage a financial crisis. And No, google alone will not cut it because it is far too important. Any individual or SME ultimately needs cashflow to survive and this process becomes even more problematic to manage in times of a financial crisis.
You have probably heard from everyone on television that we are going through an unprecedented situation. What does this mean? For your business, for yourself and for your loved ones, what does it mean? Regardless of the nature of the crisis, the first group that feels the impact is usually the small and micro business owners and their employees. This is exactly what has happened in Australia in the last two months.
Starting a new business puts you in an exciting frame of mind that's all about creating new beginnings. When you're just beginning, thinking about the end is probably the last thing on your mind. What you need to realise is that a good business plan is a long-term plan, with both a start and a finish. By planning your business exit strategy before you begin, your journey will be more rewarding, and your business better equipped to deal with future challenges.
In the last issue of BiziNet, we spoke about how important it is for small and medium businesses to have a telephone system in place. Here we explain how important it is to have a phone system that boosts your business and offers new features which were not available just a few years ago.
In this time of social distancing, it gives us time to think and muse about the "bigger" questions. This isolation has led me to my uni days of studying philosophy: in particular the work of Thomas Kuhn. Kuhn said that scientists work within a framework of paradigms that they do not question. Going with the flow and not questioning why or seeing if there are other and better ways of doing something.
There is little doubt that these are challenging times for many businesses and families. As pen goes to this paper there are 771,984 confirmed cases of Coronavirus (COVID-19) worldwide, with at least 4,245 confirmed cases in Australia*, countless businesses either closed or on the brink of closing with no defined timeline for when they might re-open and unemployment is inexorably rising.
Even prior to the Coronavirus saga, there was a lot of emphasis on going digital. Companies were investing an enormous amount of their time attempting to build a digital presence through the utilisation of all kinds of social media channels, online tools and other miscellaneous digital marketing opportunities. However, at the same time, most of the said companies actually relied on their physical presence and face-to-face meetings between sales personnel and potential clients to get them to sign the dotted line (an obvious exception to this case are businesses that actually operate online full-time and sell, and to these rare entities who manage to achieve this and be profitable enough to pay your staff wages at the same time, I salute your success).