ASSISTANCE AVAILABLE TO SMALL BUSINESSES

Senator the Hon Michaelia Cash

Minister for Employment, Skills, Small and Family Business

Senator for Western Australia

27 March 2020

(As at 1.00pm AEST 27 March 2020)

These are extraordinary times for all Australians. The coronavirus is having a devastating impact on Australian jobs and small businesses.

The Morrison Government is acting to cushion the blow from the coronavirus for businesses and households to help them get through to the other side of this crisis as the world deals with the significant challenges posed by its spread.

For the latest information on the Coronavirus, please visit australia.gov.au.  This site will link you to the up-to-date news, updates and advice from Australian Government Agencies.

Below I have set out a summary of the measures available to small businesses and sole traders under the $189 billion economic support package announced by the Prime Minister.

I have also included in the table at the end of this letter the measures announced by each State and Territory Government in response to the coronavirus crisis to assist you and your stakeholders in finding the right support.  

Helpline available

The Morrison Government’s Business Hotline – 13 28 46 – has been expanded to provide specialist advisers and extended hours to support small and medium businesses impacted by the COVID-19 pandemic. You can also send an email.

The Hotline operates seven days per week, and provide an additional two hours a day of support outside standard operating hours for the first month, answering calls from 7.00am to 11.00pm AEST.

During these challenging times businesses that have been impacted by COVID-19 need readily available access to advice so they can fully understand the assistance available to them and their employees.

Assistance for Sole Traders

The Government also recognises a significant number of sole traders and Australians who are self-employed have had their income reduced as a result of the COVID-19.

The Government is temporarily expanding eligibility to income support payments and establishing a new, Coronavirus supplement to be paid at a rate of $550 per fortnight. This supplement will be paid to both existing and new recipients of the eligible payment categories. These changes will apply for the next six months.

Some sole traders may apply for income support to supplement their income. To ensure they can keep focusing on their business, sole traders and the self-employed will be able to meet their mutual obligations by continuing to run, operate and diversify their businesses over the next six months.

Sole traders who have a reduction in their turnover of 20 per cent or more will be able to access up to $10,000 of their superannuation before 1 July 2020 and a further $10,000 after 1 July 2020.  We are making sure that sole traders and the self-employed have maximum flexibility to keep their doors open in these extraordinary circumstances.

To view the media release in full, please click here.

For further information:  https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Support_for_sole_traders.pdf

Early release of superannuation

The Government will allow individuals in financial stress as a result of the COVID-19 to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. The withdrawals will be tax free.

Individuals wishing to apply for early release of their superannuation will be able to do so from mid-April 2020. Applications can be made to the myGov website: www.my.gov.au.

For further information: https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Early_Access_to_Super_1.pdf

Boosting Cash Flow for Employers

Tax free payments of up to $100,000 will be made to eligible businesses with a turnover of under $50 million, to provide temporary cash flow support to businesses that employ staff.

This will work by giving eligible businesses that withhold tax to the ATO on their employees’ salary and wages a payment equal to 100 per cent of the amount withheld.

Eligible businesses that pay salary and wages will receive a minimum payment of $20,000. Payments will be made automatically on lodgement of activity statements.

This measure will benefit around 690,000 businesses employing around 7.8 million people. 

For further information: https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Cash_flow_assistance_for_businesses_0.pdf

$1.3 billion measure Supporting Apprentices and Trainees

Employers of apprentices and trainees who employ less than 20 full-time staff can apply for a wage subsidy of 50 per cent, of up to $7,000 per quarter, for each trainee or apprentice they employ.

This applies to trainee and apprentice wages paid for the period from 1 January 2020 to        30 September 2020 up to a maximum of $21,000 per eligible apprentice or trainee.

This will support up to 70,000 small businesses and around 117,000 apprentices.

Supporting Small Business to Get to the Other Side with Loans 

The Government has announced a new Coronavirus Guarantee Scheme to support small and medium businesses with a turnover less than $50 million.

This measure compliments the $8 billion worth of measures the banks announced last week to defer loan repayments for six months for small and medium businesses battling the impacts of coronavirus.  Small businesses should contact their bank to apply.

Details

Under the Scheme, the Commonwealth will guarantee 50%, through the participating banks, of an eligible loan to small and medium enterprise customers that have been impacted by the coronavirus.

• The Scheme will have the capacity to support lending of $40 billion to small and medium businesses.
• Loans will be used for working capital purposes and be unsecured and it will be for loans granted within 6 months starting 1 April 2020.
• The Scheme will apply to new or existing customers of banks and non-bank lenders.
• Lenders will not be charged a fee for accessing the Scheme.
• It will be repayment free for 6 months.
• The maximum loan will be $250,000 for a term up to 3 years.
• It will not apply to re-financing of existing customers. Those already have existing loans that will benefit from the ABA announcement.

Through this measure, the Government is offering to guarantee $20 billion.

The Government’s announcement of the Scheme follows the announcement by the Government on 19 March 2020, together with the Reserve Bank, to inject more than $100 billion into the Australia’s financial system. Please click here for the Government’s release and here for the Reserve Bank’s release.

For further information:  https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Supporting_the_flow_of_credit_1.pdf

Australian Taxation Office (ATO) Support

The ATO has set up an Emergency Support Infoline – 1800 806 218.  The Infoline provides tailored advice to support small business who may be having difficulties meeting their tax and super obligations.

Small businesses can contact the ATO to defer some payments and vary instalments that are due. These include income tax, activity statement, pay as you go (PAYG) instalments, FBT and excise payments by up to six months.

Sole traders and self-employed Australians who are PAYG instalments payers, may vary their PAYG instalments on their activity statement. They may do this by lodging a revised activity statement before the instalment is due and before the tax return for the year is lodged. Sole traders and self-employed Australians who vary their PAYG instalment rate or amount can also claim a refund for any instalments made during the 2019–20 financial year.

Where PAYG instalments are varied, the ATO won’t apply penalties or charge interest to varied instalments for the 2019–20 financial year and if a mistake is made in working out the PAYG instalment, the sole trader and self-employed Australian may correct it by lodging a revised activity statement or varying a subsequent instalment.

For more information: https://www.ato.gov.au/Individuals/Dealing-with-disasters/In-detail/Specific-disasters/COVID-19/

Increasing the Instant Asset Write-Off

We are increasing the instant asset write off threshold from $30,000 to $150,000, and expanding access to businesses with aggregated annual turnover of less than $500 million until 30 June 2020.

For further information: https://treasury.gov.au/sites/default/files/2020-03/Fact_Sheet-Delivering_support_for_business_investment.pdf

Backing Business Investment

Businesses with a turnover of less than $500 million can, until 30 June 2021, 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.

Support for Coronavirus affected regions and communities

An initial $1 billion has been allocated to support those regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.

The $1 billion will be provided through existing or newly established Government programs.

For further information:  https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_severely_affected_regions_and_sectors.pdf

These measures reflect our collective determination to do what it takes to support Australian jobs and Australian businesses as we work together through this complex and rapidly evolving challenge.

Sincerely

Senator the Hon Michaelia Cash

Minister for Employment, Skills, Small and Family Business

Senator for Western Australia