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Support for businesses: Latest Commonwealth and State Government updates on COVID-19

“The outbreak of the coronavirus (COVID-19) and the responses from governments, both federal and state, has put restrictions on some businesses and forced many to close, which has consequences for employees,” says the Fair Work Commission (FWC) in its latest COVID-19 update. “Please read this Information note – Government responses to COVID-19 pandemic.”

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The FWC has outlined an extensive list of assistance available to Australian businesses because of the coronavirus:

Assistance for businesses from the Commonwealth Government was first announced on 12 March 2020 that included:

increases to the instant asset write-off and accelerating depreciation deductions;
payments of between $2000 and $25,000 for small to medium-sized businesses making less than $50 million in turnover;
assistance for small business employing trainees and apprentices by supporting 50 per cent of apprentice/trainee wages for 9 months from 1 January 2020 to 30 September 2020.

A second package from the Commonwealth Government was announced on 22 March 2020 that included the following:

 a boost to cashflow of 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, to keep business operating, pay rent, electricity and other bill and retain staff. This measure is estimated to benefit around 690,000 businesses employing around 7.8 million people, and around 30,000 NFPs (including charities).

o Employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000, with the minimum payment being increased from $2,000 to $10,000. Additional payments to be introduced during the July–October 2020 period; 

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; 

temporary increase in 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 introduction of a 15-month investment incentive that will accelerate depreciation deductions for businesses with turnover of less than $500 million. These businesses will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost; 

following the initial support to businesses employing trainees and apprentices, 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; 

support of $1 billion to regions most significantly affected by the Coronavirus outbreak. These funds will be available to assist during the outbreak and the recovery. In addition, assistance has been provided to the airline industry by providing relief from a number of taxes and Government charges estimated to total up to $715 million; 

 guarantee of 50 per cent to SME lenders to support new short-term unsecured loans to SMEs. Fact sheet: 

Reference: https://treasury.gov.au/coronavirus/businesses

 

State governments have announced adjustments to payroll tax and other measures to assist businesses, including:

  • • New South Wales:waiving payroll tax for businesses with payrolls of up to $10 million for three months, bringing forward the next round of payroll tax cuts by raising the threshold limit to $1 million in 2020–21, waiving a range of fees and charges for small businesses including bars, cafes, restaurants and tradies and $250 million to employ additional cleaners of public infrastructure, such as transport.
  • • Victoria:full payroll refunds for the 2019-20 financial year for small and medium businesses with payroll of less than $3 million, government to pay to all outstanding supplier invoices within 5 business days, liquor licensing fees for 2020 to be waived for affected venues and small businesses.
  • • Queensland:deferral of payroll tax for 6 months, grants of up to $7 500 (excl. GST) to support new equipment purchases
  • • Western Australia:one-off grants of $17,000 to small businesses, applications to defer payment of 2019–20 payroll tax, and the $1 million payroll tax threshold brought forward by 6 months to 1 July 2020.
  • • Tasmania:waiving of payroll tax for the last four months of 2019–20 for hospitality, tourism and seafood industry businesses, introduction of a youth employment payroll tax rebate scheme for young people from 1 April 2020, additional $5000 grants for businesses that hire an apprentice or trainee.
  • ACT: a 12-month waiver on food business registration and on-licence liquor licencing fees from 1 April 2020, a one-off 6 month payroll tax waiver for hospitality (cafes, pubs, hotels, clubs and restaurants), creative arts and entertainment industries from April to September 2020, deferral of 2020-21 payroll tax (interest free to 1 July 2022) for all ACT business with nation-wide wages of up to $10 million.
  • • NT:eligible businesses will get a grant of $10 000 for upgrades and a further $10 000 if they contribute $10 000 of their own funds.

                

Support for individuals and households

Assistance for employees and households initially included one-off payments of $750 to be made from 31 March 2020 to selected income support recipients.

Further assistance for households was announced by the Commonwealth Government on 22 March 2020:

  • • temporarily expanding eligibility for income support payments and establishing a new, temporary Coronavirus supplement, paid at $550 per fortnight. Both existing and new Jobseeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit recipients are eligible;
  • • a second payment of $750 to social security, veteran and other income support recipients and eligible concession card holders made from 13 July 2020 (individuals who received the first payment of $750 and remain eligible for the second payment will receive both payments, unless they have received the $550 Coronavirus supplement in which case they will not eligible for the second payment);
  • • individuals to access up to $10 000 of their superannuation in 2019–20 and $10 000 in 2020–21 without needing to pay tax on the amounts released;
  • • 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 reduce these rates by another 0.25 percentage points. As of 1 May 2020, the upper deeming rate will be 2.25 per cent and the lower deeming rate will be 0.25 per cent.

 

Measures taken to restrict gatherings and non-essential business

 The Commonwealth Government has initiated the following guidelines for social distancing in order to stop or slow the spread of the disease:

  • • avoid handshaking and kissing;
  • • visit shops sparingly;
  • • consider whether outings and travel are necessary;
  • • reconsider non-essential business travel; and
  • • the suspension of non-essential gatherings for an initial period of 4 weeks.

On 13 March 2020, the Commonwealth and State Governments agreed to advise against all non- essential organised public gatherings of more than 500 persons, effective from 16 March 2020. This did not impact schools, workplaces, hospitals, public transportation, domestic travel and universities as well as public transient places such as shopping centres.

In addition, on 18 March 2020, non-essential indoor gatherings of more than 100 people (including staff) and outdoor activities of more than 500 people were not to be permitted. 

Essential gatherings include:

  • • public transport;
  • • medical and health care facilities, pharmacies, emergency service facilities;
  • • correctional facilities, youth justice centres or other places of custody, courts and tribunals;
  • • Parliaments;
  • • food markets, supermarkets and grocery stores, shopping centres; and
  • • office buildings, factories, construction sites and mining sites.

For outdoor gatherings of fewer than 500 people, there must be no more than 1 person per 4 square metres of ground space.

The guidelines also explain that, from midday local time on 23 March 2020, restrictions on opening were placed on the following facilities:

  • • pubs, registered and licensed clubs (excluding bottle shops attached to these venues), hotels (excluding accommodation);
  • • gyms and indoor sporting venues;
  • • cinemas, entertainment venues, casinos and night clubs;
  • • restaurants and cafes restricted to takeaway and/or home delivery; and
  • • religious gatherings, places of worship or funerals (in enclosed spaces and other than very small groups and where the 1 person by 4 square metre rule applies).

    

Further measures, along with clarification of current guidelines, were announced on 24 March 2020 by the Commonwealth Government, which will apply from 11.59pm local time on 25 March 2020. Restrictions on opening were placed on the following facilities:

  • • food courts (takeaway and/or home delivery remain operational);
  • • auction houses, real estate auctions and open house inspections (with the exception of private appointments for inspection);
  • • outdoor and indoor markets will be a decision for each state/territory (food markets continue to remain operational);
  • • beauty therapy, tanning, waxing, nail salons, tattoo parlours, spa, and massage parlours;
  • • hairdressers and barber shops to only have appointments of up to 30 minutes and must abide by the 1 person by 4 square metre rule;
  • • gaming or gambling venues;
  • • strip clubs, brothels and sex on premises venues;
  • • concert venues, theatre, arenas, auditoriums, stadiums (live streaming of a performance by a small group can be permissible with social distancing observed);
  • • amusement parks, arcades and play centres (indoor and outdoor);
  • • community and recreation centres except for those that host essential voluntary or public services, such as food banks or homeless services;
  • • health clubs, fitness centres, yoga, barre and spin facilities, saunas, bathhouses and wellness centres;
  • • boot camps, personal training operating inside (for outside events, limited to groups of no more than 10 people and social distancing must be exercised);
  • • social-sporting based activities and swimming pools;
  • • residential facilities, such as hotels, hostels, bed and breakfasts, campsites, caravan parks, and boarding houses will be a decision for each state and territory (excludes permanent residents and workers);
  • • galleries, museums, national institutions and historic sites;
  • • libraries, community centres, and youth centres;
  • • local government non-essential facilities and services (i.e., libraries and pools)
  • • community facilities (i.e., community halls, RSLs, PCYCs);
  • • weddings restricted to a maximum attendance of 5 people and where the 1 person per 4 square metre rule applies; and
  • • funerals restricted to a maximum attendance of 10 people and where the 1 person per 4 square metre rule applies.

In addition, a ‘do not travel’ ban on Australians travelling overseas will be implemented, with exemptions to citizens that ordinarily live overseas, where travel is essential or necessary, where travel is in the national interest, and on compassionate and humanitarian grounds. Further, measures will be taken to prevent price gouging and exporting products essential to preventing and controlling COVID-19.

Reference: https://www.pm.gov.au/media/update-coronavirus-measures-24-March-2020