The Australian government has instituted a raft of measures to help businesses – particularly small and medium-sized enterprises (SMEs) – weather the economic fallout caused by the coronavirus pandemic.
These measures are designed to help smaller businesses pay their bills, retain staff, purchase assets, obtain credit, and continue supporting trainees through these unprecedented times.
Prime Minister Scott Morrison said the government was acting to cushion the blow for businesses to help them get through to the other side of the crisis.
“We want to help businesses keep going as best they can and for as long as they can, or to pause instead of winding up their business. We want to ensure that when this crisis has passed Australian businesses can bounce back,” he said.
“We know this will be temporary. That’s why all our actions are geared towards building a bridge, keeping more people in work, enhancing the safety net for those that aren’t and keeping businesses alive so they can get to the other side and stand up their workforce as quickly as possible.
“The next few months are going to be a difficult journey but we all have a role to play to adapt to the changes we’re facing, to cushion the impact of what is happening and to pull together so we can bounce back when we get to the other side.”
Below we have outlined several of the main programs that SMEs can avail themselves of to help them through the coming months.
$100,000 cashback
SMEs can get up to $100,000 to help with cash flow so they can keep operating, pay their bills, and retain staff during the pandemic.
SMEs with aggregated annual turnover under $50m and that employ workers are eligible. The payments will come in two tranches, half this year, and half in the next financial year.
This cash-flow boost will be a tax-free payment to employers and is automatically calculated by the ATO, with no new forms required. The payment will be an automatic credit in the business activity statement system from 28 April.
Eligible employers that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 100 per cent of the amount withheld, up to a maximum payment of $50,000 on this BAS, and the same in the new financial year.
Eligible employers that pay salary and wages will receive a minimum payment of $10,000, even if they are not required to withhold tax, and the same in the new financial year.
The payments will only be available to active eligible employers established prior to 12 March this year.
For more information, see the relevant page on the Treasury website.
$150,000 instant asset write-off
The government is increasing the instant asset write-off threshold from $30,000 to $150,000, it is also expanding access to the scheme to include businesses with aggregated annual turnover of less than $500 million (up from $50 million).
This scheme is only available for the remainder of the financial year, which means it covers any assets purchased before 30 June.
The threshold applies on a per-asset basis, meaning businesses can write off multiple assets. It also applies to both new and used assets, so long as the assets have been purchased in the current financial year.
The government said in the 2017-18 financial year, more than 360,000 businesses used the instant asset write-off, claiming deductions valued at more than $4bn.
For more information, see this fact sheet from the Treasury.
Government loan guarantee scheme
The Australian government will make available loan guarantees for some SMEs as part of its effort to combat the fallout from the coronavirus pandemic.
The scheme is available for printers and all SMEs, including sole traders, with a turnover of up to $50m, for loans totalling up to $250,000 per borrower.
These loans can be up to three years, with an initial six-month repayment holiday, and the borrowers will not have to provide an asset as security for the loan.
The Coronavirus SME Guarantee Scheme will be available for new loans made by participating lenders through to September.
Businesses interested in the Coronavirus SME Guarantee Scheme should contact their financial institution for more information. The scheme will officially commence in April, but funds may be accessed earlier, depending on your lender.
For more information, see this fact sheet from the Treasury.
Help with apprentice wages
The Australian government is offering to pay half of an apprentice or trainee’s wages at an eligible business for the first nine months of this year.
The government said employers would be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee, which works out to be $7000 per quarter.
The subsidy will be available to any small businesses employing fewer than 20 full-time employees, who retain an apprentice or trainee who was working with the small business on 1 March.
The subsidy will be available to businesses after an Australian Apprenticeship Support Network provider undertakes an eligibility assessment.
The government expects the measure to support up to 70,000 small businesses employing about 117,000 apprentices or trainees.
Businesses can register for the subsidy starting in early April, and final claims for payment must be lodged by the end of the 2020 calendar year.
Further information is available from the Department of Education, Skills and Employment website at: www.dese.gov.au and at Australian Apprenticeships website at: www.australianapprenticeships.gov.au.
