FinTech Australia has created a short guide to help fintech businesses navigate through these times of uncertainty and better understand how they can receive assistance from the Government
Federal Government Stimulus Packages
Updated April 2020 – Government Assistance Guide
The Government has designed this guide to provide a general overview around what financial and regulatory relief governments are providing to businesses affected by COVID-19 and their employees, as well as answering some of the more common questions that are arising for businesses.
The material in this guide is of a general nature and should not be regarded as legal or financial advice or relied on for assistance in any particular circumstance or situation. In any important matter, you should seek appropriate independent professional advice in relation to your own circumstances including but not limited to legal, tax and accounting advice. The Australian Chamber of Commerce and Industry accepts no responsibility or liability for any damage, loss or expense incurred as a result of the reliance on information contained in this guide.
Updated April 2020 – Jobkeeper payment Employer Guide
ACCI has prepared this guide on the JobKeeper payment, which seeks to explain and answer some of the more common questions employers may have around the payment scheme.
Employers should at all times be conscious of their particular legal obligations applicable under the Fair Work Act 2009, their respective State and Territory WHS legislation and workers compensation legislation, as well as enterprise agreements, awards, contracts and policies and should seek further advice where necessary.
The Morrison Government’s Business Hotline – 13 28 46 – will be expanded to provide specialist advisers and extended hours to support small and medium businesses impacted by the COVID-19 pandemic.
The Reserve Bank has offered a $90 billion lending facility to banks for small business. A new fund set up by the central bank would reduce the funding costs of commercial banks, but only on the proviso that those banks help push through more affordable lending to small and medium sized businesses which should help stimulate economic activity or at least prevent a further loss of it.
Boosting cash flow for employers
Not-for-profits and SBEs will receive up to $100,000, with a minimum payment of $20,000. Eligibility will be based on the prior financial year turnover. The payment will be delivered by the ATO as an automatic credit in the activity statement system from 28 April 2020, upon employers lodging eligible upcoming activity statements. Eligible employers that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 100% of the amount withheld, up to a maximum payment of $50,000. Eligible employers that pay salary and wages will receive a minimum payment of $10,000, even if they are not required to withhold tax.
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 federal government will provide a guarantee of 50% to SMEs for new unsecured loans to be used as working capital. The government will provide eligible lenders with a guarantee for loans with the following terms:
- maximum total size of loans of $250,000 per borrower;
- loans of a three-year duration, with an initial six-month repayment holiday; and
- loans will be unsecured.
This scheme will commence by early April 2020 and will be made available for new loans made by participating lenders until 30 September 2020.
Backing business investment
A time-limited 15 month investment incentive (expiring on 30 June 2021) will be introduced in order to support business investment and economic growth by accelerating depreciation deductions. Under this measure, businesses with aggregated turnover below $500 million will be able to immediately deduct 50% of the cost of an eligible asset on installation. Existing depreciation rules will apply to the balance of the asset’s cost.
Below is a table that illustrates the IAW and BBI deduction amounts in the first year of acquisition, as compared to the existing small business simplified depreciation pool rules, using an asset with a cost of $260,000.
Supporting apprentices and trainees
Small businesses will be able to apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage, paid for up to nine months and commencing 1 January to 30 September 2020. The maximum subsidy amount is $21,000 per apprentice or trainee, or $7,000 per quarter per apprentice or trainee. This subsidy will only be available for businesses employing fewer than 20 full-time employees, and where the apprentice or trainee has been in training with the business from 1 March 2020.
Employers can register for the subsidy from April 2020 and claims for payment must be lodged by 31 December 2020.
Coronavirus Business Liaison Unit
A Coronavirus Business Liaison Unit has been established within The Treasury to engage with business on a regular basis and provide updates to government on crucial issues.
Support from New South Wales Government
The NSW Government has announced a state economic stimulus package. This includes:
- $450 million for the waiver of payroll tax for businesses with payrolls of up to $10 million for three months (the rest of 2019-20)
- $56 million to bring forward the next round of payroll tax cuts by raising the threshold limit to $1 million in 2020-21
- the creation of a $1 billion Working for NSW fund to sustain business, create new jobs and retrain employees
- an additional three-month deferral of payroll tax for businesses with payrolls of up to $10 million
- deferral of payroll tax for business with payrolls over $10 million for six months (up to $4 billion deferred)
- a range of other support packages for business, health and the community.
Premier Gladys Berejiklian, Treasurer Dominic Perrottet and Minister for Finance and Small Business Damien Tudehope, announced today that the NSW Government will put $750 million into the Small Business Support Fund, enabling eligible small businesses affected by the shutdown to access grants of up to $10,000. Applications will be available through Service NSW within a fortnight and remain open until 1 June 2020.
Support from Victorian Government
The Victorian Government has announced $500 million to establish a Business Support Fund to assist small to medium businesses most impacted by the COVID-19 outbreak.
For advice and support for businesses, please call our dedicated business hotline on 13 22 15.
As part of the package, the Government will provide full payroll tax refunds for the 2019-20 financial year to small and medium-sized businesses with payroll of less than $3 million – giving $550 million back to businesses who need it. Payments will save eligible businesses up to $113,975 a year, with businesses saving an average of $23,000. These businesses employ around 400,000 workers. This assistance is a refund, not a loan. The same businesses will also be able to defer any payroll tax for the first three months of the 2020/21 financial year until 1 January 2021, freeing up a further $83 million in cashflow.
Support from Queensland Government
Expressions of interest are now open for a $500 million loan facility to support Queensland businesses, impacted by COVID-19, to retain employees and maintain their operations. The loan facility will comprise low interest loans of up to $250,000 for carry on finance with an initial 12-month interest free period.
Support from Government of South Australia
An immediate economic stimulus package worth $350 million has been announced by the Marshall Liberal Government, to help drive the South Australian economy and secure local jobs.
Support from Government of Western Australia
The WA State Government announced a $607 million stimulus package to support WA households, pensioners and small businesses in the wake of COVID-19. The package includes:
- $114 million in measures to support Western Australian small and medium businesses.
- payroll tax paying businesses with a payroll between $1 million and $4 million will receive a one-off grant of $17,500
- $1 million payroll tax threshold brought forward by six months to July 1, 2020
- small and medium sized businesses affected by COVID-19 can now apply to defer payment of their 2019-20 payroll tax until July 21, 2020