NEWSFLASH - More Federal Government Stimulus announced today…..here’s everything you need to know for your business
What a week it has been! Since the initial economic response by the Federal Government was announced last Thursday, 12 March, the social distancing and associated health measures have continued to increase, having substantial impacts on Australian businesses.
It is going to be a very tough time for all of us in SME land, so Nine Advisory will be working overtime to ensure that we are supporting all of our clients. Whether it be re-assessing your costs base and unit economics of your business, discussing strategies to smooth cashflow hurdles, revising your forecasts to look at various scenarios or just helping formulate basic decision-making frameworks around the next steps on this rough ride, we will be here.
For all of you, we will be spending a significant amount of time working through the various state and federal government stimulus offerings to ensure that you are getting the maximum available support you are entitled to.
So, the first step is to provide an overview of what has been announced today for your business. (We have tried to avoid the jargon and put this in plain English where possible!)
Up to $100,000 for eligible small businesses
This is basically an upsizing of the previously announced $25k PAYGW payment, which they have now made a maximum of $50k and will match 100% of the PAYGW from March to June 2020 period. The second $50k is exactly the same, just to be claimed from July to October 2020 period.
They have also said that these payments will only be available to active eligible employers established prior to 12 March 2020.
Your turnover must be less then $50m to be eligible and you simply need to have employees for whom you withhold tax on wage payments.
The government are going to subsidise 50% of the apprentice or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020, up to $21,000 per eligible apprentice or trainee. It will be capped at $7,000 per quarter.
The subsidy will be available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee. The apprentice or trainee must have been in training with a small business as at 1 March 2020.
You will be required to have an eligibility assessment undertaken by an Australian Apprenticeship Support Network (AASN) provider.
Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.
Further information is available at:
The Department of Education, Skills and Employment website at: www.dese.gov.au
Australian Apprenticeships website at: www.australianapprenticeships.gov.au
The federal government will provide a guarantee of 50% to SME lenders for new unsecured 3 year loans of up to $250k per borrower to be used for working capital. These loans will also have an initial 6 month repayment holiday.
Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions
The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.
Other measures announced
Temporary relief for financially distressed businesses
Increase in the threshold for creditors to issue statutory demands from $2k to $20k for the next 6 months.
Increase in the threshold for initiating bankruptcy proceedings from $5k to $20k for the next 6 months.
Plus an increase in timeframe whereby you are required to respond to a bankruptcy notice or a statutory demand from 21 days to 6 months.
Directors will be temporarily relieved of their duty to prevent insolvent trading with respect to any debts incurred in the ordinary course of the company’s business. Egregious cases of dishonesty and fraud will still be subject to criminal penalties.
Temporary early access to superannuation
Eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020.
To apply you must satisfy on or more of the following:
You are unemployed; or
your working hours were reduced by 20 per cent or more; or
if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent or more.
No tax will be payable on these amounts
You can apply directly to the ATO through the myGov website: www.my.gov.au
