Second Economic Support Package to provide further relief for AFTA/ATAS Members.
22 March 2020
The Commonwealth Government has released the second stage of its economic plan worth $66.1 billion, to cushion the economic impact of the coronavirus (COVID-19) and help build a bridge to recovery.
The second cash injection brings the Government’s economic support package to a total of $189 billion, equivalent to 9.7 per cent of GDP.
In a live press conference at Parliament House the Prime Minister, Scott Morrison MP reassured Australian’s that it was dedicated to providing sustainable and scale measures that would help Australian businesses keep going and bounce back when the crisis has passed.
This latest economic support package includes;
- Support for households including casuals, sole-traders, retirees and those on income support,
- Assistance for businesses to keep people in a job, and
- Regulatory protection and financial support for businesses to stay in business
Read the official media release here.
Below is a summary of the economic response package as it applies to AFTA/ATAS Members:
1. Boosting Cash Flow for Employers
The Government is enhancing the Boosting Cash Flow for Employers measure it announced on 12 March 2020. The Government is providing up to $100,000 to eligible small and medium-sized businesses that employ people, with a minimum payment of $20,000. Small and medium-sized business entities with aggregated annual turnover under $50 million and that employ workers are eligible.
Under the enhanced scheme, employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000.
An additional payment is also being introduced in the July — October 2020 period. Eligible entities will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments they have received. This means that eligible entities will receive at least $20,000 up to a
total of $100,000 under both payments.
2. Temporary relief for financially distressed businesses
The ATO will tailor solutions for owners or directors of business and the Government is temporarily:
- Increasing the threshold at which creditors can issue a statutory demand on a company and to initiate bankrupt proceedings against an individual;
- Increasing the time companies and individuals have to respond to statutory demands they received;
- Relief for directors from any personal liability for trading while insolvent; and
- Flexibility in the Corporations Act 2001 to provide targeted relief from provisions of the Act
3. Support for immediate cash flow needs for SMEs
The Government to guarantee 50% of any new business loans, up to $250,000, required to help businesses get through this unprecedented period. The business loan is unsecured and no repayment required for 6 months.
In this video, the Australian Small Business and Family Enterprise Ombudsman Kate Carnell explains what the Coronavirus SME Scheme is and dispells some of the myths around it.
4. 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. This reform will help small businesses get access to credit quickly and efficiently.
5. Increasing the instant asset write-off
The Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
6. Temporary early release of superannuation
The Government is allowing individuals affected by the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. Individuals will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
7. Supporting apprentices and trainees
The Government is supporting small businesses to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for 9 months from 1 January 2020 to 30 September 2020.
Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
If you have any questions, the AFTA Team remain at your disposal and will do our utmost to support you where possible.
Please contact us on 02 9287 9900 or email@example.com.