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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.
https://treasury.gov.au/sites/default/files/2020-04/fact_sheet-boosting_cash_flow_for_employers.pdf
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.
https://treasury.gov.au/coronavirus/businesses
The Government is providing vital support to sole traders to withstand the economic impacts of the Coronavirus.
https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet-Support_for_sole_traders_1.pdf
The Government has extended the JobKeeper Payment by a further six months to March 2021. Support will be targeted to businesses and not-for-profits that continue to be significantly impacted by the Coronavirus. The payment rate will be reduced and a lower payment rate will be introduced for those who work fewer hours.
https://treasury.gov.au/sites/default/files/2020-08/Fact_sheet-JobKeeper_Payment_extension_1.pdf
The Government has amended the Fair Work Act to enable employers who qualify for, and are entitled to, the JobKeeper Payment to temporarily vary work arrangements for eligible employees in order to keep people employed.
https://treasury.gov.au/sites/default/files/2020-08/Fact_sheet-Changes_to_Fair_Work_Act.pdf
The JobKeeper Payment and the related programs represent a significant investment to support the Australian economy and people in the face of the Coronavirus crisis. To protect this investment, the framework for the JobKeeper Payment has robust features to ensure integrity and allow swift and effective action to be taken against fraud and other abuse.
https://treasury.gov.au/sites/default/files/2020-08/Fact_sheet_Protecting_integrity.pdf
Treasury completed a three-month review of the JobKeeper Payment in June 2020, informed by the status of the Coronavirus outbreak and the economy.
https://treasury.gov.au/sites/default/files/2020-07/jobkeeper-review-2020_0.pdf
https://www.ato.gov.au/general/jobkeeper-payment/employers/enrol-for-the-jobkeeper-payment/
https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet_Protecting_integrity.pdf
https://treasury.gov.au/sites/default/files/2020-05/JobKeeper_payment_frequently_asked_questions.pdf
https://treasury.gov.au/sites/default/files/2020-05/Fact_sheet_JobKeeper_Info_for_Employers.pdf
https://www.ato.gov.au/General/JobKeeper-Payment/In-detail/JobKeeper---timeline-of-content-updates/
https://www.ato.gov.au/general/jobkeeper-payment/In-detail/JobKeeper-guide---sole-traders/
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".
https://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/media-releases/jobkeeper-update
https://treasury.gov.au/sites/default/files/2020-05/Fact_sheet_JobKeeper_supporting_businesses.pdf
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.
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Supporting_the_flow_of_credit_1.pdf
https://coronavirus.fairwork.gov.au/
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.
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Payments_to_support_households_0.pdf
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.
https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet-Income_Support_for_Individuals.pdf
https://www.employment.gov.au/news/covid-19-mutual-obligation-exemptions-extended-until-22-may-2020
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.
https://treasury.gov.au/sites/default/files/2020-05/Fact_sheet_support_for_nfp_organisations.pdf
Eligible small businesses, not-for-profits, and other business types that have fewer than 20 Full Time Equivalent (FTE) staff (including non-employing businesses, such as sole traders) as at 1 March 2020 can apply for recovery grants of $500 to $3000.
This grant helps small businesses get back to business by meeting the costs of safely reopening or upscaling operations, for example:
This grant can only be used for purchases of eligible expenses made from 1 July 2020, where no other government support is available.
https://www.service.nsw.gov.au/transaction/apply-small-business-covid-19-support-grant
https://www.revenue.nsw.gov.au/news-media-releases/covid-19-tax-relief-measures/parking-space-levy
https://www.service.nsw.gov.au/campaign/covid-19-help-small-businesses
https://www.sro.vic.gov.au/coronavirus
https://www.qld.gov.au/about/industry-recovery/business-and-industry-support
https://www.smallbusiness.wa.gov.au/blog/wa-coronavirus-relief-package
https://www.smallbusiness.wa.gov.au/coronavirus
https://www.wa.gov.au/government/coronavirus-covid-19
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.
https://www.business.gov.au/Grants-and-Programs/Tourism-Fast-Track-Support-Program-NT
https://businessrecovery.nt.gov.au/businesses
https://www.business.tas.gov.au/covid-19_business_support_packages
We are now trying to get people back to work and keep managing the health crisis. This is the time to confront the incredibly complicated employment processes. The Prime Minister at his National Press Club address in May 2020 described Australia's IR system as one "...that has to date retreated to tribalism, conflict and ideological posturing," he called on all parties to lay down their arms.
by COSBOA, Council of Small Business Organisations Australia
Jobkeeper benefit have been a lifeline for many since the day it was announced by the Prime Minister. However, it was a quick design that came with a lot of mistakes and damaging effect on the economy. It all began with the registration form that allowed some employers to enter 1,500 employees mistakenly; even though they meant 1, in their minds.
Covid-19 was first confirmed in late January 2020. Subsequently on 20 March 2020 restrictions such as the closing of our borders and social distancing were introduced. Since these restrictions were introduced, I have read and listened to webinars regarding the importance of cashflow for a business and household during and coming out of the pandemic. OK - but what about emotional cashflow? What is your current level of emotional cashflow? Why is it important for small to medium enterprises ("SMEs") and households?
by Bruce Gleeson, Jones Partners Insolvency And Business Recovery
Now more than ever it is critical for your business to address the causes of its cash flow issues. There is a danger that unsustainable businesses are being propped up by the current availability of government stimulus, Reliance on stimulus payments is a short-term solution. A band-aid fix, ignoring the treatment of the real problem.
All businesses, whether an established or new business, can potentially benefit from applying for grant funding.
State and Federal Government has really come along way offering many new grant opportunities to support the growth of businesses all over Australia. Recently NSW has offered the Small Business COVID-19 Recovery Grant to help support businesses affected by COVID-19 to get back into business. Its key focus is to provide a small infusion of funds which can be used to drive marketing for growth or resourcing for reopen.
The COVID-19 pandemic has caused rapid changes in consumer behaviour across virtually every industry - and the predominant effect is that the focus of the consumer has shifted to digital experiences and transactions. This has put many business owners into a situation where their livelihood is at stake - facing an "adapt or die" scenario. For many unfortunate businesses the "adapt" part is not feasible as their services rely on face-to-face experiences and there is little room for change. But for others, they may have the luxury of the opportunity to transform their operations and to save their businesses before government support runs out.
The virus may have triggered this downturn. But it's the fragility of Australia's economic makeup that has our governments panicking. We have a houses and holes economy.
Australia's economic complexity is dismal. We're down at number 93 on the list - just above Pakistan. About 70% of the products we sell to foreign buyers, on a net basis, are minerals and energy. The rest of our wealth is mostly tied up in a $6.9 trillion housing market. One that breathes by way of population growth (mainly from immigration) and high levels of private debt.
The proliferation of zombie companies pre Covid-19 has largely been fuelled by reduced financial pressure. Examples being financial institutions continuing to offer (or not otherwise call in) finance to non-viable companies and also the impact of lower interest rates particularly post the global financial crisis ("GFC"). During the Covid-19 pandemic these zombie companies have been allowed to gather further momentum and the damage that this is likely to cause post Covid-19 presents a real and present danger for those that are transacting with them.
by Bruce Gleeson, Jones Partners Insolvency And Business Recovery
Why do we say that Government assistance and stimulus packages are not the answer for your business? The reason is simple. They do not fix the underlying business issues that are threatening to derail your business.
While they are a welcome relief in a time of crisis, they are a form of pain relief. They ease the pain but do little to fix the real problems with your business.
COVID-19 has taught us all that we really can do things differently. Many of our clients are rethinking their distribution channels and concentrating on an eCommerce mindset, rather than direct to store (DTS) as many stores are no longer operating as they once were. With the rapid turnaround required, the shift is truly challenging.
"I need to recover my debts/rent, I've got to take them to court."
Covid 19 has brought the most difficult times for some businesses reminiscent of the Great Depression of the 1930's. Whilst we are all together in this economic downturn, keeping communications open is an absolute necessity. Regretfully, whilst most people are being respectful, some are using the Covid 19 restrictions to avoid debts owed.
