COVID-19 stimulus packages and financial support for small businesses

Small and medium-sized businesses are eligible for various coronavirus support measures, including tax relief, cash flow boosts and income support.

Few global economies have escaped the effects of COVID-19 (coronavirus). Australia’s treasurer, Josh Frydenberg, estimated that shutdown measures have cost the country a staggering $4 billion per week in reduced activity¹. However, the introduction of the stimulus package by the Federal Government in the wake of widespread economic downturn gives small to medium businesses some hope for their survival, with much needed financial support introduced to help retain staff, boost cash flow and, most importantly, stay afloat.

Here’s a guide to the coronavirus support Australian businesses can expect from April 2020 onwards.

JobKeeper payments

The Federal Government introduced the JobKeeper payment in April 2020 as a way to help small to medium business owners, including sole traders, partnerships, trusts, not-for-profits and charities, keep their staff employed. With this scheme, the government makes a payment of $1,500 per eligible employee per fortnight for a period of six months between 30 March and 27 September 2020 to eligible businesse² . Read more information and check your company’s eligibility for the JobKeeper payment.

Assistance for apprentices and trainees 

If you employ apprentices or trainees, you could be entitled to a wage subsidy of 50 % for these employees, to a maximum of $21,000 per employee (or $7,000 per eligible employee per quarter up to 30 September 2020). Read more information on apprentice and trainee coronavirus support³.

Cash flow boosts

One measure that offers considerable help for Australian businesses affected by economic downturn as a result of coronavirus is the tax-free cash flow boost. This offers eligible businesses a credit of between $20,000 and $100,000, generally equal to the amount withheld from wages and salaries paid to employees. It’s automatically delivered as credits in the activity statement system when the statements are lodged. Find out if your business is eligible for a cash flow boost⁴.

Instant asset write-off threshold increase

An increase to the instant asset write-off threshold has also been introduced for eligible businesses. The threshold has been increased from $30,000 to $150,000 and is now available for businesses with an aggregated annual turnover of less than $500 million⁵. Read more information and the eligibility criteria for the instant asset write-off.

Additional assistance by state and territory

In addition to the assistance package offered by the Federal Government, each state and territory has its own measures intended to assist with the running of small to medium businesses.

New South Wales

Until the end of this financial year, eligible businesses can defer payroll tax, with an additional three-month deferral for companies that have payrolls of $10 million or less. There’s also an increase in the tax-free threshold from $900,000 to $1 million, as well as Small Business Support Grants of up to $10,000⁶. Read more on COVID-19 help for small businesses in NSW.

Queensland

For the 2020 calendar year, eligible businesses in Queensland can enact a deferral of payroll tax, in conjunction with a refund of two months’ payroll tax and a three-month payroll holiday. Find out if you’re eligible to receive coronavirus business assistance in Queensland.

Victoria

Eligible businesses in Victoria have been offered a deferral of payroll tax for the first three months of the 2020–21 financial year, a full refund of payroll tax for the 2019–20 financial year as well as rent relief and deferral of land tax for commercial tenants in government buildings⁷. Read more information on coronavirus (COVID-19) business support in Victoria.

Western Australia

In addition to a four-month exemption from payroll tax for small businesses affected by coronavirus with a payroll of under $7.5 million, eligible businesses with a payroll of between $1 million and $4 million can apply for a $17,500 grant. Small business customers connected to Synergy and Horizon are also offered a one-off credit of $2,500 on power bills⁸. Read the eligibility criteria and more information on small business stimulus package in WA.

ACT

ACT businesses that operate under the prohibited activities list may receive a one-off payroll tax waiver from April to September 2020, as well as an interest-free deferral of 2020–21 payroll tax payments until 1 July 2022. The state government will also be waiving fees for licensing for all food business registrations and liquor licences for a 12-month period and a rebate of $750 for eligible businesses will also be directly applied to their next electricity bill⁹. Read more information and the eligibility criteria for business support packages in ACT.

South Australia

Eligible businesses will receive a six-month waiver of payroll tax, beginning April 2020, as well as a waiver of liquor licence fees for the 2020–21 financial year for businesses affected by coronavirus and forced to close¹⁰. Read more information and the eligibility criteria for business support in SA.

Tasmania

If your business falls within the hospitality, tourism or seafood industries or has a payroll of less than $5 million, you could receive a payroll tax waiver for the entire 2019–20 financial year. There’s also the opportunity to access three-year, interest-free business loans, a liquor licence discount of 50 % and a waiver on application fees, as well as a freeze on utility bills¹¹. Read more information on the business stimulus package and support in TAS.

For help with your business finances, speak to your accountant, financial or business adviser. If you don’t have a financial adviser, you can contact us on 131 267 or find an adviser online.

^{The Federal Government has announced an extension to some of its economic support measures since this article was published. Find out more.}

^{1 The Guardian: Australia's coronavirus lockdown to cost $4bn a week in reduced economic activity – treasurer
2 Australian Taxation Office: JobKeeper Payment
3 Business.gov.au: Supporting apprentices and trainees
4 Australian Taxation Office: Boosting cash flow for employers
5 Business.gov.au: Increasing the Instant Asset Write-Off
6 Service NSW: COVID-19 help for small businesses
7 Business Victoria: Coronavirus (COVID-19) business support
8 Small Business Development Corporation: WA Government small business stimulus/relief package
9 ACT Government: Supporting local businesses and the economy
10 Government of South Australia: COVID-19 business information and support
11 Tasmanian Government: Stimulus and support}