Australian Stimulus Package: What You Should Know

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Australian Stimulus Package What You Should Know
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• The Australian Government and banking
  institutions have united to assist small
  businesses weather economic uncertainty.
• This page is a list of the concessions and help
  available to businesses.
• Federal Government
• On 12 March, the Government has announced a 17.6
  billion economic plan to deal with the
  significant challenges posed by the spread of the
  coronavirus.
• This initial package has been expanded with a
  further announcement on 22 March that brings the
  consolidated assistance provided by the Federal
  Government to 189 Billion.

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• Supporting business investment
• Providing cash flow assistance to help small and
  medium sized business to stay in business and
  keep their employees in jobs
• Targeted support for the most severely affected
  sectors, regions and communities
• Household stimulus payments that will benefit the
  wider economy
• The Government plans to introduce the package of
  Bills for the relief measures into Parliament on
  23 March. What has been announced is set out
  below.

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• REAL, CASH MONEY FOR SMALL BUSINESS OWNERS
• i) 100 Cashback on PAYG Withholding, up to
  100,000
• Business entities with annual aggregated turnover
  of less than 50 million 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 100,000.
• Eligible businesses that pay salary and wages
  will receive a minimum payment of 20,000, even
  if they are not required to withhold tax.

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• The ATO will deliver the payment as a credit to
  the business upon lodgment of their activity
  statements. Where this places the business in a
  refund position, the ATO will deliver the refund
  within 14 days. The payment will be a tax-free
  refund or credit.
• The payment will be tax free and delivered by the
  ATO as a credit in your Business Activity
  Statement (BAS) from 28 April 2020. Quarterly BAS
  lodgers will get the credit in the June-20
  quarter BAS. Monthly IAS lodgers will get a
  credit of 100 from the March-20 IAS up to the
  June-20 IAS. Any existing debt with the ATO this
  will be offset against your existing liability.
• The Government has also announced that there will
  be an additional payment in the July October
  2020 period equal to the total of all the
  payments made in the period prior to June
  limited to the maximum threshold of 100,000.

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• The benefit is for limited time only and applies
  to the PAYG Withholding on wages between 1
  January 2020 and 30 June 2020.
• If for example you have spent more than 100,000
  in PAYGW for the 6 month period between 1 January
  and 30 June 2020, you should receive 100,000
  from the Government. If you have spent 30,000 in
  PAYGW for the same period, you will get 30,000.
  These credit will be applied by the ATO as from
  28 April.
• Any employer that has received the maximum 100k
  payment will not be entitled to a further payment
  in the July October quarter. The employer that,
  for example, received a 30,000 refund will
  receive a further 30,000 refund in the July
  October quarter.

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• How to apply?This credit will automatically be
  processed upon lodgement for your BAS and IAS by
  iKeep.
• ii) 50 subsidy on apprentice wages, up to
  21,000
• Eligible employers can apply for a wage subsidy
  of 50 of apprentice or trainee wages for up to 9
  months from 1 January 2020 to 30 September 2020
  (up to a maximum of 21,000 per eligible
  apprentice or trainee).
• If a small business is not able to retain an
  apprentice, the subsidy will be available to a
  new employer that employs that apprentice.
• How to apply?Employers can register for the
  subsidy from early April 2020 with final claims
  for payment due by 31 December 2020.

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• iii) Instant asset write-off increase
• For new or second-hand assets first used or
  installed ready for use from 12 March until 30
  June 2020, the instant asset write-off threshold
  will be increased from 30,000 to 150,000 for
  businesses with aggregated annual turnover of
  less than 500 million (up from the current 50
  million threshold). The threshold applies on a
  per asset basis, so eligible businesses can
  immediately write-off multiple assets.
• The threshold will revert to 1,000 for small
  businesses (for businesses with a turnover less
  than 10 million) from 1 July 2020.

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• iv) 50 investment incentive
• The Government is introducing a time limited 15
  month investment incentive (to 30 June 2021).
  Businesses with aggregated annual turnover of
  less than 500 million per annum will be entitled
  to accelerated depreciation deductions. Eligible
  businesses will be able to deduct 50 of the cost
  of an eligible asset upon installation. Assets
  must be acquired after 12 March 2020 and first
  used or installed by 30 June 2021.
• There is no asset value threshold for this 50
  investment incentive and the existing
  depreciation rules will continue to apply to the
  remaining balance of the assets cost over its
  effective life. Therefore, an eligible asset will
  generate the immediate deduction of 50, plus in
  the same year will generate a Division 40
  depreciation deduction calculated in accordance
  with the normal depreciation rules.

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• How to apply?This credit will be processed on
  the preparation and lodgement of your 2020 income
  tax return.
• Tax Payment Deferrals
• The ATO has announced a series of payment
  deferral concessions for businesses directly
  impacted by COVD-19. These concessions are
• Deferring by up to 4 months the payment date of
  amounts due through the business activity
  statement (including PAYG instalments), income
  tax assessments, fringe benefits tax assessments
  and excise duty.

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• Allowing businesses on a quarterly reporting
  cycle to opt into monthly GST reporting in order
  to get faster access to GST refunds they may be
  entitled to.
• Allowing businesses to vary Pay As You Go (PAYG)
  instalment amounts to zero for the March 2020
  quarter. Businesses that vary their PAYG
  instalment to zero can also claim a refund for
  any instalments made for the September 2019 and
  December 2019 quarters.
• Remitting any interest and penalties, incurred on
  or after 23 January 2020, that have been applied
  to tax liabilities and
• Allowing affected businesses to enter into
  low-interest payment plans for their existing and
  ongoing tax liabilities

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• How to apply?The ATO assistance is not
  automatic, contact your iKeep team, who will
  approach the ATO to request assistance, and if
  eligible, the ATO will tailor the assistance
  package for you.
• Non-iKeep clients can call the ATOs Emergency
  Support Infoline on 1800 806 218 to discuss
  relief options based on their needs and
  circumstances.
• Temporary relief for financially distressed
  businesses
• The Government has also announced a series of
  measures that are aimed at lessening the threat
  of legal action against businesses that could
  cause them to become insolvent and force them
  into liquidation.

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• These measures include
• An increase to the threshold at which creditors
  can issue a statutory demand on a company and
  initiate bankrupt proceedings against an
  individual. The new threshold limit has not been
  released yet.
• The time companies and individuals have to
  respond to statutory demands they receive will be
  increased. Now 6 months, previously 21 days.
• Directors are temporarily relieved from any
  personal liability for trading while insolvent.
• New measures that introduce some flexibility to
  the Corporations Act 2001 targeted at providing
  relief from the provisions of the Act to deal
  with the unforeseen events that arise as a result
  of the Coronavirus health crisis have been
  announced. No further detail is available as to
  what these amendments are.

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• The Government also announced that the ATO will
  tailor solutions for owners and directors that
  are currently struggling due to the Coronavirus.
  The assistance offered by the ATO to business
  will including a temporary reduction of payments
  or deferrals of tax liabilities, or withholding
  enforcement of liabilities by not proceeding with
  actions such as Director Penalty Notices and the
  wind-up of a business.
• How to apply?The ATO assistance is not
  automatic, contact your Kelly Partners client
  director, who will approach the ATO to request
  assistance, and if eligible, the ATO will
  tailor the assistance package for you.
• Non- iKeep clients can call the ATOs Emergency
  Support Infoline on 1800 806 218 to discuss
  relief options based on their needs and
  circumstances.

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• Supporting the flow of credit
• The Government, the Reserve Bank of Australia and
  the Australian Prudential Regulatory Authority
  have taken coordinated action to ensure the flow
  of credit in the Australian economy. These
  measures include
• Support for immediate cash flow needs for SMEs
  Under the Coronavirus SME Guarantee Scheme, the
  Government will provide a guarantee of 50 to SME
  lenders to support new short-term unsecured loans
  to SMEs. The Scheme will guarantee up to 40
  billion of new lending.
• Quick and efficient access to credit for small
  business The Government is cutting red tape by
  providing a temporary exemption from responsible
  lending obligations for lenders providing credit
  to existing small business customers.

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• Reserve Bank of Australia Supporting the flow
  and reducing the cost of creditThe Reserve Bank
  of Australia (RBA) announced a package on 19
  March 2020 that will put downward pressure on
  borrowing costs for households and businesses.
• The RBA announced a term funding facility for the
  banking system. Banks will have access to at
  least 90 billion in funding at a fixed interest
  rate of 0.25 per cent. This will reinforce the
  benefits of a lower cash rate by reducing funding
  costs for banks, which in turn will help reduce
  interest rates for borrowers. To encourage
  lending to businesses, the facility offers
  additional low-cost funding to banks if they
  expand their business lending, with particular
  incentives applying to new loans to SMEs.

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• In addition, the RBA announced a further easing
  in monetary policy by reducing the cash rate to
  0.25 per cent. It is also extending and
  complementing the interest rate cut by taking
  active steps to target a 0.25 per cent yield on
  3-year Australian Government Securities.
• Support for Non-ADI and smaller ADI lenders in
  the securitisation market.
• The Government is providing the Australian Office
  of Financial Management (AOFM) with 15 billion
  to invest in structured finance markets used by
  smaller lenders, including non-Authorised
  Deposit-Taking Institutions (non-ADI) and smaller
  Authorised Deposit-Taking Institutions (ADI).
  This support will be provided by making direct
  investments in primary market securitisations by
  these lenders and in warehouse facilities.

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• Australian Prudential Regulatory Authority
  Ensuring banks are well placed to lend
• The Australian Prudential Regulatory Authority
  has announced temporary changes to its
  expectations regarding bank capital ratios. The
  changes will support banks lending to customers,
  particularly if they wish to take advantage of
  the new facility being offered by the RBA.
• 2) State Government NSW
• Payroll Tax Concessions
• For businesses whose total grouped Australian
  wages for the 2019/20 financial year is less than
  10M

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• will have their annual tax liability reduced by
  25 when they lodge their annual reconciliation,
  which is due on 28 July.
• For those taxpayers who lodge and pay monthly, no
  payment is required for the months of March,
  April or May 2020 ie. the payroll tax is
  completely waived
• When lodging your annual reconciliation, you will
  still need to provide wage details paid in these
  months and will receive the benefit of a 25
  reduction in the amount of tax you would have had
  to pay for 2019-20.
• How to apply?
• This will be automatically applied for the
  payroll tax returns covering above mentioned
  periods.

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• will have their annual tax liability reduced by
  25 when they lodge their annual reconciliation,
  which is due on 28 July.
• For those taxpayers who lodge and pay monthly, no
  payment is required for the months of March,
  April or May 2020 ie. the payroll tax is
  completely waived
• When lodging your annual reconciliation, you will
  still need to provide wage details paid in these
  months and will receive the benefit of a 25
  reduction in the amount of tax you would have had
  to pay for 2019-20.
• How to apply?
• This will be automatically applied for the
  payroll tax returns covering above mentioned
  periods.

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• Other ConcessionsThe NSW government has also
  announced the following concessions
• The raising of the NSW payroll tax threshold to
  1 million as from July 2020 anda waiver of a
  range of fees and charges for small businesses
  including bars, cafes, restaurants and tradies.
• VIC
• The Victorian government has announced a 1.7
  billion economic survival and jobs package that
  includes the following assistance to SME
  businesses

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• SME businesses with payrolls of less than 3
  million will be refunded their payroll tax.
  Payments to eligible businesses will commence
  from 23 March.
• SME businesses with payrolls of less than 3
  million will also be able to defer any payroll
  tax for the first three months of the 2020/21
  financial year until 1 January 2021.
• Commercial tenants in government buildings can
  apply for rent relief.
• A Business Support Fund will be established to
  support the hardest hit sectors, including
  hospitality, tourism, accommodation, arts and
  entertainment, and retail.

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• How to apply?Vic businesses can now access
  information on the support services being
  provided on dealing with COVID-19, including how
  to access financial support available through the
  national stimulus package, by calling the
  Business Victoria hotline on 13 22 15. A
  coronavirus business support page has also been
  created. Find it here.
• QLD
• Interest Free State Government LoansThe QLD
  Government will offer 500m in loans to eligible
  businesses to retain employees and maintain
  operations. Details are
• Loans up to 250,000

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• First 12 months interest free
• Currently taking expressions of interest before
  rolling out the concessional loans
• How to apply?Expressions of interest application
  is herePayroll Tax Concessions
• Deferred payroll tax returns until 31 July
  2020Payroll Tax Concession Summary
• How to apply?
• Complete the online payroll tax deferral
  application form

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• 3) Banks and Lending Institutions
• Specific COVID-19 concessions have been announced
  by the following banks
• i) Commonwealth Bank (CBA)
• Deferring repayments on a variety of business
  loan and overdraft products, for 6-months.
• Reducing commercial interest rates by 0.25
• Waiving merchant terminal fees for impacted
  customers with CBA payment terminals, for 90
  days.
• Waiving early redraw fees on business term
  deposit accounts (including Farm Management
  Deposit accounts).
• Waiving establishment fees and excess interest on
  Temporary Excess products.

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• Deferring repayments on vehicle and equipment
  finance loans, and providing tailored
  restructuring options that meet individual
  customer needs.
• How to apply?Speak with your CBA Bank Manager.
• ii) ANZ
• Suspending interest repayments
• Deferral of business loan repayments for up to 6
  months, assessed on a case-by-case basis
• Providing early access to term deposits without
  incurring break fees
• Providing access to additional credit subject to
  approval

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• How to apply?Contact ANZ or your relationship
  manager.
• iii) NAB
• Deferral of business loan repayments for up to 6
  months, assessed on a case-by-case basis
• Extension of a business loan term by a period of
  up to three months, where individual
  circumstances warrant
• Support to restructure existing business loans,
  including equipment finance
• Business credit card deferred repayments.
• How to apply?Contact NAB or your relationship
  manager

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• iv) Westpac
• Continuing its hardship assistance program
• Deferral of business loan repayments for up to 6
  months, assessed on a case-by-case basis
• How to apply?Contact Westpac or your
  relationship manager

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• v) Bendigo
• Home Loan and Business Loan customers can apply
  for relief on loans for up to three months
• Waiver of fees for the restructuring or
  consolidation of loans
• Credit card customers can apply for an emergency
  credit card limit increase
• Discounted interest rates on new personal loans
  taken out by existing Bendigo Bank customers
• Waiver of interest rate reduction for early
  withdrawals on term deposits prior to maturity
• Deferral of payments and extensions for Equipment
  Finance on a case by case basis

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• How to apply?
• Contact Bendigo Bank or your relationship manager
• https//www.ikeep.com.au/