So by now we don’t think there’s a business owner in Australia who hasn’t heard about the Coronavirus pandemic, COVID-19, that’s unfolding in real time around the globe. Apart from the many affects that will be felt by all of society such as:
– changing rules to gatherings
-travel restrictions and border closings,
-heightened hygiene measures,
-self isolation practices
-and the medical implications for those that become infected,
a lot of small business owners are also thinking about the economic effect and what that will mean in practical and financial terms for their small business.
On the 12th March the Australia Government announced a $17.6 billion economic stimulus package with the aim to “keep Australians in jobs, keep businesses in business and support households and the Australian economy as the world deals with the significant challenges posed by the spread of the coronavirus.” Prime Minister Scott Morrison said as part of the plan up to 6.5 million individuals and 3.5 million businesses would be directly supported by the package.
What does this support look like?
Let’s get into the tangible strategy that the Government is putting in place to help small business owners weather the economic implications.
- The instant asset threshold will increase by $120,000 from $30,000 to $150,000. They are also expanding the eligibility base by now including businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. For example, some assets that may be eligible to immediately written off are building equipment, office or shop fit out items, and work vehicles.
- Government accelerated depreciation deductions for small businesses. Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase.
- A boost in cash flow for employers by up to $25,000 – with a minimum payment of $2,000 for eligible small and medium-sized businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax free. Businesses will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.
- Money has also been allocated to supporting businesses who support trainees and apprentices. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020.
- $1 billion has also been put aside to specifically assist those SME’s which operate in industries that will bedisproportionately affected by the coronavirus such as tourism and agriculture. Plans and measures to support recovery will be designed and delivered in partnership with the affected industries and communities.
- Tax payments. The Government is also offering administrative relief for certain tax obligations, including deferring tax payments up to four months on a case by case basis.
These measures are set to support over 3.5 million businesses (which make up over 99% of Australian businesses), employing more than 9.7 million employees or 3 in every 4 workers.
Helping one another.
Funda encourage our clients, as well as the wider business community, to support local and independent businesses where possible. A lot of multinational corporations will be able to weather the economic impacts of the Coronavirus a lot better than many local small businesses. So think about your suppliers and support small business where possible. Not only are you helping a fellow entrepreneur though this collectively challenging time, you are helping to stimulate our National economy.
We support Aussie business.
Panic and confusion will settle down soon enough and life will need to go on, things may be a bit different for a while, but we know just how resilient small business owners can be. If you do need some extra financial support through this evolving situation, you can view our business loan options here. For more information on the Governments stimulus package click here.