FEDERAL GOVERNMENT & SRO MEASURES
Over the course of the weekend, the Federal Government, and State Revenue Office (SRO), have outlined their response to the recent Coronavirus Pandemic, currently taking place in Australia, and the rest of world.
Below is a comprehensive summary of the outlined measures, both for individuals and businesses alike.
We would like to stress, while this summary has been taken from the various government offices, the stimulus package is not yet law, and may be subject to some changes and variations to the wording below.
If any of the below items are of interest to you, either personally or for your business, please don’t hesitate to contact the team at Smith Feutrill to discuss further.
FEDERAL
Supporting Individuals and Households
- Support to welfare recipients, by providing Individuals currently receiving welfare payments, will receive an additional $550/fortnight in a special COVID-19 supplement payment.
- Broadening of the welfare system, by making benefits available to a wider range of people, including self-employed, and recently made redundant employees.
- Further broadening of the welfare system, by removing the “Asset test” from welfare assessments during the period of the COVID-19 supplement.
- 2 separate payments of $750 to be made to eligible welfare recipients.
- Payment 1 to begin being made from 31 March
- Payment 2 to be made from 13 July
- Allowing Superannuation withdrawals to eligible unemployed, welfare, and employees to significant impact to their work hours, by allowing them to withdraw up to $20,000 from superannuation – $10,000 before 30 June, and $10,000 post 30 June. This will be a tax free withdrawal.
- Allowing preservation of superannuation, and providing flexibility to not sell assets, by allowing superannuation funds to reduce their minimum drawdown rates by 50% for the 2020 and 2021 financial years.
- Increasing welfare payments by reducing the upper and lower Social Security deeming rates by .75% each.
Support for Business
- Boosting cashflow to eligible businesses who employ staff, by providing between $20,000 and $100,000 of tax free incentives, based on tax withheld on wages
- 50% to be provided as a credit to the eligible business ATO Accounts.
- 50% to be progressively paid as cash payments, from June 2020.
- Additional support to eligible businesses to employee trainees and apprentices
- Temporary relief to financially distressed businesses, by providing comfort and security to continue trading. This is done by providing:
- A temporary increase in the threshold in which creditors can issue statutory demands for 6 months.
- A temporary increase to the minimum amount to initiate bankruptcy proceedings for 6 months.
- Temporary relief from Directors personal liability whilst trading while insolvent
- Promotion of business investment, by increasing the eligibility of the Instant Asset Write Off by:
- Broadening eligibility by making available to businesses with a turnover of up to $500m
- Increase eligible assets from $30,000 to $150,000
- Additional accelerated depreciation until 30 June 2021, but allowing eligible businesses to take an up front deduction of 50% of the cost of any new assets, with the balance to be depreciated as normal.
Supporting the Flow of Credit
- Support from the Government, by guaranteeing 50% of loans made to eligible small businesses, up to $250,000, to assist banks in providing unsecured business loans for working capital
- By allowing lenders to move beyond responsible lending guidelines, for 6 months, for all new and existing business loans.
STATE – VICTORIA
Payroll Tax Waived
- Eligible businesses taxable wages of less than $3m will have their payroll tax waived for the whole financial year. Businesses must still lodge returns, but no payment is to be made. Furthermore, existing payments will be progressively refunded by the SRO over the coming months.
- Eligible businesses can also defer payment for the first 3 months of the next financial year, being July-September 2020.
Liquor Licence fees waived
- Businesses that have paid their renewal licence fee will be reimbursed and those yet to pay will have their business waived.
Land Tax deferral
- Landowners due to pay 2020 land tax that have at least 1 non-residential property and total taxable landholdings under $1m have the option to defer their 2020 payment to 31 December 2020.
Smith Feutrill