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COVID-19 Economic Stimulus available for Businesses and Employers


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.


JobKeeper payment


Under the JobKeeper Payment, businesses significantly impacted by the Coronavirus outbreak will be able to access a subsidy from the Government to continue paying their employees. This assistance will help businesses to keep people in their jobs and re-start when the crisis is over.


These businesses will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020.


Cash flow support for small and medium businesses


The Government is providing temporary cash flow support between $10,000 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.

Eligible businesses and NFPs, must have held an Australian Business Number on 12 March 2020 and lodge their activity statement to receive the credit. Charities registered with the Australian Charities and Not for profits Commission are eligible, regardless of when they were registered, if they meet the other eligibility requirements.


Temporary relief for financially distressed businesses


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 Coronavirus health crisis.


The ATO will tailor solutions for owners or directors of business that are currently struggling due to the Coronavirus, including temporary reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.


Increasing the instant asset write-off


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.


Backing business investment


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. Businesses with a turnover of less than $500 million 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.


Supporting apprentices and trainees


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).

Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer.

This measure will ensure the continued development of the skilled workforce. Support will also be provided to the National Apprentice Employment Network, the peak national body representing Group Training Organisations, to co-ordinate the re-employment of displaced apprentices and trainees throughout their network of host employers across Australia.


Support for Coronavirus-affected regions and communities


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.


Support for immediate cash flow needs for SMEs


The Coronavirus SME Guarantee Scheme will provide small and medium sized business with timely access to working capital to help them get through the impact of the Coronavirus.


The Government will provide eligible lenders with a guarantee for loans with the following terms:

• SMEs, including sole traders, with a turnover of up to $50 million.

• Maximum total size of loans of $250,000 per borrower.

• Loans will be up to three years, with an initial six month repayment holiday.

• Unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.


The decision on whether to extend credit, and management of the loan, will remain with the lender. However, the Government expects that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions when determining whether credit should be extended.


As part of the loan products available, the Government will encourage lenders to provide facilities to SMEs that only have to be drawn if needed by the SME. This will mean that the SME would only incur interest on the amount they draw down. If they do not draw down any funds from the facility, no interest will be charged, but they will retain the flexibility to draw down funds should the need arise.


SMEs interested in the Coronavirus SME Guarantee Scheme should approach their financial institution for more information. The Government is working with banks and other eligible lenders to ensure loans are available as soon as possible. While the scheme officially commences from April 2020, your bank or other lenders may be able to provide credit sooner, and still benefit from the guarantee.


Source: Australian Government Treasury https://treasury.gov.au/

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