by Jahnvi Modi, Devan Bishop and Chrissy Slater
Summary of the stimulus package
Following the announcement of the economic response by the Morrisson government on 12th March 2020, the Australian states and territories also announced their respective economic stimulus packages to further support Australian households and businesses survive the impact of the Covid-19 situation.
The summary below provides detailed information in relation to the measures introduced by each of the Australian states and territories. Please contact our office if you have any questions about how these measures affect you and your business.
On 21 March 2020, the Victorian government announced a three stage $1.7 billion assistance Economic Survival Package to help Victorian businesses and workers survive the devastating impacts of the coronavirus pandemic. The package includes following key measures:
1. Stage 1 – $700 million towards the following measures,
- $550 million towards full pay roll tax refund for the 2019-2020 financial year for businesses with a payroll of less than $3 million. Businesses will be able to access the cash refunds by Friday, March 27.
- The eligibility threshold applies to each employer, so any member of a group that pays taxable wages of less than $3 million per annum will be eligible for the relief.
- Eligible businesses must continue to lodge returns but do not need to make further payments for 2020 financial year.
- SRO will directly contact eligible businesses in relation to reimbursement for payroll tax already paid in the financial year.
- $83 million towards deferral of payroll tax for the first three months (July, Aug & Sep 2020) of 2020 – 2021financial year until 1 January 2021, for the same businesses who are eligible for payroll tax refund for 2019-2020 year.
- Deferral of 2020 land tax payments until 1 January 2021 for landowners who are due to pay 2020 land tax and have at least one non-residential property and total taxable landholdings below $1 million. Tax will need to be paid in full by 31 March 2021.
- Non-residential property includes:
- Commercial property,
- Industrial property, and
- Vacant land (excluding residential vacant land).
- If 2020 land tax has been paid, it can be requested to be refunded. However, the tax will need to be paid in full by 31 March 2021.
- SRO will contact all eligible taxpayers in relation to this measure.
- Non-residential property includes:
- $30 million support to hospitality sector by waiver of 2020 liquor license fees for affected venues and small businesses.
- Rent relief for commercial tenants in government buildings. Government is also encouraging private landlords to offer rent relief as well.
2. Stage 2 – $500 million towards establishing a Business Support Fund for hardship payments, small grants and tailored support.
- The funds would be distributed in consultation with the Victorian Chamber of Commerce and Industry, the Australian Hotels Association, the Australian Industry Group and other industry representatives.
- The funds will go towards sectors (including hospitality, tourism, accommodation, arts and entertainment and retail),
- that are doing it tough,
- who may not be eligible for payroll tax refunds due to their size; and
- require more tailored support to survive and keep people in work.
3. Stage 3 – $500 million towards establishing Working for Victoria Fund, in consultation with the Victorian Council of Social Services and Victorian Trades Hall Council. The fund will be used for:
- Helping workers, who have lost their jobs, find new opportunities including work in cleaning public infrastructure or delivering food;
- Providing vital contributions to the state’s response to the pandemic and affording those Victorians security when its needed most;
- Facilitating job matching to help Victorians find short-term or casual roles.
Further support from government
Further to the above measures, the government will make payment of all outstanding supplier invoices within 5 business days, which will release up to $750 million cash in the economy earlier. The private sector is urged to do the same where possible. The Government will announce further support over the coming weeks and months, in consultation with the Commonwealth, as the impacts of the coronavirus continue to evolve.
new south wales
On 17 March 2020, the NSW Government announced a $2.3 billion health boost and economic stimulus package, to help to protect communities and jobs in the face of the COVID-19 outbreak over the next six months. The package includes two key components:
$1.6 billion for business support and jobs
1. Waiver of payroll tax for businesses with payrolls of up to $10 million for three months (the rest of 2019-20). While it is not currently clear, it is expected that the payroll tax exemptions will be applied automatically.
2. Bring forward the next round of payroll tax cuts by raising the threshold limit to $1 million in 2020-21.
3. Waive a range of fees and charges for small businesses including bars, cafes, restaurants, and tradespeople.
- It is not yet clear exactly which fees will be waived, or for how long; and
- This measure will be administered through Service NSW, and the waiver will be communicated via that channel.
4. Employ additional cleaners of public infrastructure such as transport assets, schools, and other public buildings.
- This measure will provide job opportunities as well as make travelling safe for people.
5. Bring forward maintenance on public assets including social housing and crown land fencing. Bring forward capital works and maintenance.
- It’s unclear how these contracts will be managed;
- The measure is intended to provide opportunities “for businesses of all sizes,” and to create employment.
$700 million in extra health funding
6. This measure will assist in,
- Boosting ICU capacity;
- Preparing for additional COVID-19 testing;
- Purchasing additional ventilators and medical equipment;
- Establishing acute respiratory clinics; and
- Bringing forward elective surgeries to private hospitals.
On 16 March 2020, 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 the following key measures:
$114 million payroll tax support for small businesses
1. $1 million payroll tax threshold brought forward by six months to July 1, 2020.
- Businesses with payroll of less than $1 million will become exempt from payroll tax.
- Employers who cancel their registration as a result of the increase will need to wait until the annual reconciliation function is available in August 2020 for adjustments to be made to their tax liability.
2. a one-off grant of $17,500 for payroll tax paying businesses with a payroll between $1 million and $4 million, to assist them to manage the impacts of COVID-19.
- For a group of employers, a single grant will be payable to the designated group.
- Grants will be paid automatically by cheque from July 2020, businesses do not need to apply for grants.
- There may be delays for businesses whose tax status changed during 2018-2019 year or who became liable for payroll tax during 2018-19 or 2019-20 assessment year.
- Eligible businesses should log in to Revenue Online to ensure that their postal addresses are up to date.
3. Deferral of 2019 – 2020 payroll tax payments until 21 July 2020 for businesses (that pay $7.5 million or less in wages and have been impacted by COVID-19).
- A business will be eligible if they are an employer (or part of a group of employers).
- A business is ‘affected’ if turnover, profit, customer numbers, bookings, retail sales, supply contracts, or other factors have seen a negative impact, because of the coronavirus outbreak.
- To secure the deferral, business owners have to fill in a form, and describe how their business has been affected.
- If the application is approved,
- payments will be deferred from the March return (due 7 April 2020) or the first return period after the date in which the business is affected;
- business may continue to lodge returns in Revenue Online without making payment; and
- for all deferred months, payroll tax returns must be lodged, and payroll liability paid by 21 July 2020.
$493 million to support households
4. Freeze on household fees and charges until at least 1 July 2021 (which were expected to go up by 2%). Freeze will apply to entire ‘household basket, including electricity, water, motor vehicle charges, emergency services levy and public transport fares.
5. Double the Energy Assistance Payment (EAP) from $300 to $600 to support vulnerable Western Australians, including pensioners.
WA government’s Covid-19 economic stimulus package builds on more than $760 million announced in the past few months to stimulate WA economy and comes on top of the $12.85 million local tourism package announced following the China travel ban.
On 24 March 2020, The Queensland government unveiled a new range of stimulus measures and an additional $4 billion will be invested to support Queenslander’s health, jobs, and businesses. The second stimulus package is in addition to recently announced initiatives on 17 March 2020, including the dedicated small business hotline (1300 654 687) which has seen around 2000 business contacts so far.
Please find below a snapshot of measures as per the two stimulus packages:
Measures as per second stimulus package announced on 24 March 2020
1. Support for businesses
- Payroll tax support:
- For employer (or part of a group of employers) who pays $6.5 million or less in Australian taxable wages,
- refund of your payroll tax for 2 months.
- payroll tax holiday (i.e. no payroll tax to be paid) for 3 months.
- You can also apply for a deferral of payroll tax for the 2020 calendar year. (If you have already applied for a deferral, you do not need to reapply – it will be extended. This measure was announced on 17 March).
- If you do not receive an email, or you are unsure about your eligibility, complete the refund/holiday application form.
- For employer (or part of a group of employers) who pays $6.5 million or less in Australian taxable wages,
- For employer (or part of a group of employers) who pays more than $6.5 million in Australian taxable wages and have been negatively affected (directly or indirectly) by coronavirus, you can apply for a:
- o deferral of payroll tax for the 2020 calendar year (If you have already applied for a deferral, you do not need to reapply – it will be extended. This measure was announced on 17 March).
- o refund of your payroll tax for 2 months.
- You must continue to lodge returns in OSR connect – without paying them – during this time.
- Waiver of liquor licensing fees for venues that have had to close their doors.
- Rent relief for businesses who rent premises from the state government.
- $500 rebate on power bill for this year for sole traders and small and medium businesses that consume less than 100,000 kilowatt hours. This will be automatically applied to electricity bills.
2. Support for individuals and households
- $300 million household relief package, which will give Queensland households $200 off their utility bills. This will be automatically applied through household electricity bills.
- $2.5 billion into protecting Queensland jobs and businesses.
- This includes package of up to $500 million to assist workers who lose their job or income and to help them find jobs in the industries that are vital to getting us through this crisis – health care, agriculture, food production, transport, cleaning and mining.
3. Support for health sector
- Extra $1.2 billion to expand:
- fever clinics;
- emergency department capacity;
- acute care services; and
- regional aeromedical services for our remote communities.”
Measures as per first stimulus package announced on 17 March 2020
On 17 March 2020, the Qld Government announced their first stimulus package to support businesses and manage the impact from COVID-19. The package includes the following key measures:
1. A $500 million loan facility will be created to support Queensland businesses to help them retain employees and maintain their operations. Key features of the loan facility include:
- Low interest loans of up to $250,000 for carry on finance, with an initial 12-month interest free period for businesses to retain staff.
- The Queensland Rural and Industry Development Authority (QRIDA) is responsible for the administration of these concessional loans and is currently taking expressions of interest in the lead up to rolling these loans out as soon as possible.
- Businesses are required to Register interest through QRIDA or phone 1800 623 946. QRIDA will contact the businesses when the scheme is open to applications shortly.
2. COVID-19 small business support to build resilience, grow and succeed. This includes,
- Workshops in partnership with local bodies to build financial resilience;
- Business mentoring to provide targeted advice to impacted small businesses; and
- Dedicated small business hotline (1300 654 687) to access information and referral to support services.
3. Deferral of payment of payroll tax returns until 31 July 2020.
- This would apply if,
- You are an employer (or part of a group of employers) who pays $6.5 million or less in Australian taxable wages, and
- current turnover, profit, customers, bookings, retail sales, supply contracts or other factors-compared with normal operating conditions-have been directly or indirectly affected by COVID-19.
- Payment for all 2020 payroll tax returns, (whether monthly, quarterly or annual returns), can be deferred until 3 August 2020).
- The employers are required to complete payroll tax payment deferral application form.
- Employers must continue to lodge returns in OSRconnect – without paying them – during this time. Employers can resume paying returns at any time during the deferral period.
4. A $27.25 million immediate industry recovery package to manage the impact of Covid-19 on Queensland trade. The package aims to:
- Provide targeted financial support and advice;
- Promote Queensland through marketing and media activities; and
- Provide counselling and support to businesses and students.
5. Industry specific support, including:
- A $3.66m commercial fishing industry assistance package;
- Market diversification and resilience grants of up to $50,000 for agriculture, fishing and food exporters; and
- Temporary fee relief for commercial tourism operators and hospitality businesses.
On 11 March 2020, the South Australia government announced an unprecedented response and economic package worth $350 million in the wake of the ongoing impact of bushfires, drought and coronavirus. The package includes:
1. Bring forward major new infrastructure maintenance projects including road and hospital upgrades;
2. $22 million injection in nature-based tourism infrastructure to boost employment and the long-term visitor economy in hard-hit regions; and
3. Establishment of an expanded Economic and Business Growth Fund to support local industry.
4. Projects to be funded under the Government’s economic stimulus package must meet certain criteria, including:
- The ability to start works within a short period of time;
- They must be labour-intensive; and/or
- Require significant local purchasing of materials, services, and supplies.
The government will release further details in relation to the stimulus package in the coming weeks.
On 17 March 2020, the Tasmania Government announced a $420 million package comprising stimulus measures targeted at the hospitality, tourism, seafood and exports sectors. Measures include:
1. Assistance for small businesses
- Payroll tax waivers for the last four months of 2019-20 for hospitality, tourism, seafood, and exports sectors. Other businesses with payrolls of up to $5 million, will be able to apply for payroll tax waiver for April to June 2020, based on the impact of virus;
- Introduction of youth employment scheme, which provides a payroll tax rebate for one year, to businesses that employ a young person aged 24 and under, between April and December 2020;
- Bring forward the Targeted Small Business Grants Program, providing a $5,000 grant for businessesthat hire an apprentice or trainee in the tourism, hospitality, building and construction, and manufacturing industries;
- Interest-free loans for three years,
- to the hospitality, tourism, seafood and exports sectors;
- to be made available to businesses with a turnover of less than $5 million;
- to purchase equipment or restructuring business operations;
- Government agencies will reduce payments terms from 30 days to 14 days and pay bills sooner, unless otherwise required by contractual arrangements. This will assist with small business cash flow;
- $50m in maintenance on public buildings brought forward to provide an injection into local trades around the state and continue to support confidence in local communities;
- $80,000 provided to Tasmanian Chamber of Commerce and Industry to provide human resources and industry relations assistance associated with the coronavirus to businesses.
2. Assistance for Households
- Emergency relief package to Salvation Army, Red Cross & Rural Business Tasmania to support Tasmanians who are self-isolated;
- Emergency one-off relief payment of $250 for individuals and $1,000 for families who are required to self-isolate. Eligibility includes those with Health care card or pensioners concession card and those on low income; and
- Accommodation support for those placed on home quarantine.
3. Targeted Industry assistance: Tourism, Hospitality & Fisheries
- Waiver of a number of leases, licenses and parks entry fees for tourism operators for April to June 2020;
- 50% discount on liquor licensing fees and a waiver of all application fees for 2020, back dated to 1 January 2020;
- Waiver of fees and levies for 12 months for certain fisheries;
- Establish Tourism and Hospitality Training Fund; and
- Develop Holiday at Home Campaign.
4. $4 million assistance for primary health and mental sectors
- Support for primary health care providers, including GPs to ensure they have sufficient resources to look after the community;
- Accommodation support for frontline workers, if they need to stay away from home, in cases where their family members are sick; and
- Mental health support programs by community organisations.
5. Assistance for local government
- $50 million in interest-free loans for local governments to upgrade, renovate and to do necessary maintenance to improve tourism and other assets, so when visitor numbers bounce back, Tasmania is ready.
On 18 March 2020, the Northern Territory (NT) Government announced a $65 million coronavirus stimulus package to encourage spending on home renovations and business upgrades in an effort to prevent widespread job losses across the NT.
1. $30 million on home improvement scheme.
- Scheme operates on a voucher system;
- Homeowners will get vouchers worth $6,000 for renovations if they spend $2,000;
- Homeowners will get vouchers worth $4,000 for renovations if they spend $1,000;
- Renovations should relate to physical improvements to land and/or building and repairs and maintenance services; and
- Registrations for businesses to provide services open on 30 March 2020. Applications for homeowners open on 6 April 2020.
2. $20 million on business improvement grant, including:
- $10,000 grant for all territory businesses;
- An additional $10,000 grant if the business contributes $10,000 of their own;
- Each business is only eligible to receive one grant and it can be used to complete one or two different jobs on their premises; and
- Grant can be used to purchase goods and services, to make physical improvements to a business (land and building) that help to improve efficiency and customer experience.
3. $5 million in immediate work grant to not-for-profit and community organisations, to engage local businesses to do repairs,renovations and upgrades to their property and facilities. Grants of up to $100,000 will be given as per below:
- The first $50,000 will be paid as a grant;
- NT Government will also match any renovation costs that exceed $50,000 on a dollar-for-dollar basis up to a maximum of $100,000 in total; and
- Registrations for businesses to provide services open 30 March 2020.
4. $5 million for structural adjustment package to provide direct support for cafes, restaurants and other venues who serve to the public. The program will help businesses to,
- Install partitioning to meet requirements for gatherings of less than 100 people; and
- Develop online ways of doing business.
5. Freeze increase in all government fees and charges including electricity costs.
6. Payroll tax exemption for hiring Territory employees extended to 30 June 2021.
The schemes are expected to be up and running within the next few weeks.
Should you have any queries in relation to the economic stimulus package and how it affects your business, please do not hesitate to contact us on (03) 9069 7700.