To help businesses manage the economic impacts of COVID-19, the Australian government has announced a number of stimulus packages and grants. These initiatives offer local businesses a mix of support for ongoing employment, as well as efforts to minimise income and property taxes.
Australia announced these budget measures to help businesses cope with the immediate challenges of COVID-19 and support long-term stability. The combined stimulus packages offer $320 billion in support, around 16.4% of national GDP.
The overall fiscal stimulus provided by the Australian government has primarily arrived via federal and state initiatives. The primary stimulus tools offered by the federal government are listed below.
Overview: The Australian government will pay eligible businesses up to $1,500 per fortnight per employee. Employers must pay each employee a minimum of $1,500 to be eligible for this subsidy, which will be paid in arrears from May 2020. It can be claimed for payments made to staff from 30 March 2020.
Who is eligible? Businesses with annual revenues of under $1 billion who have experienced a 30% reduction in turnover, businesses with annual revenues over $1 billion who have experienced a 50% reduction in turnover, or ACNC-registered charities that have experienced a 15% reduction in turnover. Employees must have been permanent employees as of 1 March 2020 or long-term casual employees for 12 months as of the same date, while meeting certain additional eligibility criteria.
How to access it: Employers must enrol for the JobKeeper payment and follow the steps to identify your eligible employees and lodge a monthly declaration to claim the payment through the Australian Tax Office (ATO).
Overview: Businesses can immediately write off the cost of any asset that costs less than the threshold of $150,000, an increase from $30,000. Businesses can also claim a tax deduction for the business portion of the purchase cost in the year the asset is first used or installed for use.
Who is eligible? This covers businesses with an aggregated turnover of less than $500 million, up from $50 million. Assets must be first used or installed between 12 March and 30 June 2020.
How to access it: This can be claimed by your registered tax agent through the ATO.
Overview: Eligible businesses and not-for-profits (NFPs) can receive between $20,000 and $100,000 in cash flow boosts when lodging business activity statements (BAS) up to the month or quarter to September 2020.
Who is eligible? Businesses and NFPs with less than $50 million aggregated annual turnover that held an Australian Business Number (ABN) as of 12 March 2020 and made payments to employees eligible for withholding—such as salary, wages, redundancy payments or director’s fees—and have met certain other eligibility criteria.
How to access it: Cash flow boosts can be claimed when you lodge your activity statement.
Overview: Eligible businesses and NFPs can deduct the cost of depreciating, newly-purchased assets at an accelerated rate. Small businesses with aggregated turnover of less than $10 million can deduct up to 57.5% of the business portion of a new depreciating asset (up from 15%). Businesses with up to $500 million aggregated turnover can claim up to 50% of the cost of the depreciating asset, as well as the usual amount of depreciation that would apply to it.
Who is eligible? This covers businesses and NFPs with an aggregated turnover of less than $500 million, up from $50 million. Assets must be first used or installed between 12 March 2020 and 30 June 2021, and have not additionally been claimed in the Instant Asset Write Off scheme.
How to access it: Businesses can claim the deduction when lodging tax returns for the relevant income year.
In addition to the stimulus package provided by the Australian Federal Government, the various states and territories have also used their powers to support citizens and businesses. A summary of the main financial aid tools available in each state or territory is provided below.
- Businesses with payrolls of up to $10 million may have their payroll tax obligations waived for the remainder of this financial year.
- As part of a stimulus package, $56 million has been allocated to bring forward the next round of payroll tax cuts by raising the threshold limit to $1 million in 2020-21.
- A range of fees and charges will be waived for small businesses including bars, cafes, restaurants and tradespersons.
- Businesses with more than $75,000 annual revenue and less than $650,000 payroll, which have been registered to carry out business in Victoria as of 16 March 2020 are eligible for a one-off payment of $10,000.
- The Queensland government has published a list of personal protective equipment it is willing to buy from businesses that can supply them.
- Refund or deferral of payroll tax for up to three months for businesses paying less than $6.5 million in Australian taxable wages, and up to 12 months for businesses paying wages greater than this threshold.
- Land tax relief in the form of various rebates, waivers and deferrals for the 2019-20 and 2020-21 assessment years.
- Businesses with payroll tax between $1 million and $4 million will be eligible to receive a one-off payment of $17,500.
- The payroll tax threshold will be increased to $1 million from July 1, 2020, six months earlier than planned.
- Small and medium sized businesses with payrolls of $7.5 million or less and can prove they have been directly or indirectly impacted by COVID-19 can also now apply to defer payment of 2019-20 payroll tax until July 21, 2020.
- A six-month payroll tax waiver for all businesses with an annual payroll up to $4 million. Employers with grouped annual wages above $4m able to defer for six months.
- More details from the SA Government’s Jobs Rescue package are to be announced.
- Interest-free loans will be made available for businesses with less than $5 million annual turnover in impacted industries, including hospitality, tourism and exports.
- Payroll tax waivers will be granted to businesses in impacted industries, with additional grants available for other businesses with up to $5 million in annual turnover on a case-by-case basis.
- Eligible businesses will be able to receive a six-month waiver of payroll tax. All businesses with payrolls of under $10 million will be able to defer payment of their 2020-21 payroll tax until 1 July 2022.
- Eligible food businesses, taxi or ride-sharing businesses, and businesses that require an infection control license to operate will have a number of fees waived for 12 months.
- All NT businesses will be eligible for a one-off $10,000 Business Improvement Grant.
- The Small Business Survival Fund will provide eligible businesses with an immediate survival payment of between $2,000 for businesses with only one full-time equivalent employee, and $50,000 for businesses with more than 20 full-time equivalent employees.
- Businesses with annual turnover of less than $50 million which have experienced a 30% reduction in revenue may be eligible for additional financial relief on a case-by-case basis under the Business Hardship Package.