On 12 March 2020, the Australian Government released its economic response to the coronavirus (COVID-19). The ATO also released a series of administrative concessions for taxpayers. Please refer to this BDO Tax Technical Update for more detail. During the days after, Australian States and Territories also began delivering their economic stimulus packages in response to COVID-19, including various concessions for businesses. As this is an evolving situation, please continue checking this webpage for updates and contact your local tax advisor.
On the 16 March 2020, the WA Government announced a $607 million stimulus package to support WA households and small businesses in the wake of COVID-19 with measures including:
- $402 million to freeze household fees and charges until at least 1 July 2021;
- a freeze that will apply to entire 'household basket', including electricity, water, motor vehicle charges, emergency services levy and public transport fares;
- Energy Assistance Payments (EAP) doubled to $600 to support vulnerable Western Australians, including pensioners;
- $114 million in additional measures to support small businesses;
- a one-off grant of $17,500 to payroll tax-paying businesses with an Australian payroll between $1m and $4m (with 7,400 Western Australian businesses expected to benefit from the grant which will automatically be paid by cheque from July);
- the $1 million payroll tax threshold being brought forward 1 July 2020 (six months earlier than previously planned); and
- deferral of payroll tax payments until 21 July 2020 for businesses impacted by COVID-19 that pay $7.5m or less in Australian taxable wages.
On 25 March 2020, the QLD Government announced an additional $4 billion economic relief package that includes:
- immediate payroll tax refunds of $740 million for COVID-19 affected businesses;
- a payroll tax ‘holiday’ and deferral until the end of 2020 for eligible small and medium businesses (payroll up to $6.5M) comprising:
- A two-month refund of payroll tax, giving an average of nearly $9,000 cash; and
- A three-month payroll tax holiday, saving an average of $13,360
as well as deferral of all payroll tax payments for the rest of 2020; and
- availability of the two-month payroll tax refund and deferral of all payroll tax payments for the rest of 2020 to larger businesses (payroll over $6.5M) affected by COVID-19.
On the 17 March 2020, the QLD Government announced a $500m loan facility that will be created to support businesses, which will comprise loans of up to $250,000 with an initial 12-month interest free period for businesses to retain staff. Information on the concessional loans is available at www.qrida.qld.gov.au.
The initial 6-month payroll tax deferral will also be extended to all businesses across the State. This payroll tax relief means that businesses will not need to lodge or pay payroll tax returns until31 July 2020. Further information on payroll tax deferral is available at https://www.business.qld.gov.au/running-business/employing/payroll-tax/lodging/coronavirus-tax-relief.
As with the initial payroll tax deferral offer, the QLD Office of State Revenue will also work with affected businesses to create repayment plans for the deferred tax liabilities.
A $27.25 million package was also announced to provide immediate assistance to help Queensland manage the impacts of the COVID-19 including the following:
- a $3.66m commercial fishing industry assistance package;
- temporary fee relief for commercial tourism operators;
- fees waived for liquor and gaming business applying to change trading hours or change a licenced area; and
- market diversification and resilience grants of up to $50,000 for agriculture, fishing and food exporters.
On 21 March 2002, the Victorian Government announced an ‘economic survival and jobs package’ which it says is the first of many to assist the local economy during the COVID-19 pandemic, which includes:
- providing full payroll tax refunds for the 2019-20 financial year to small and medium-sized businesses with payroll of less than $3 million;
- deferring any payroll tax for eligible small businesses the first three months of the 2020/21 financial year until 1 January 2021, freeing up a further $83 million in cashflow;
- deferring 2020 land tax payments for eligible small businesses;
- providing rent relief to commercial tenants in government buildings on an application basis;
- the Government paying all outstanding supplier invoices within five business days;
- waiving liquor licensing fees for 2020 for affected venues and small businesses;
- establishing a $500 million Business Support Fund to support the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail; and
- establishing a $500 million Working for Victoria Fund to help workers who have lost their jobs find new opportunities, including work cleaning public infrastructure or delivering food.
New South Wales
On the 17 March 2020, the NSW Government announced a stimulus package with two key components — $700 million in extra health funding and $1.6 billion in tax cuts to support jobs - to help to protect communities and jobs in the face of the COVID-19 outbreak over the next six months. Key elements of the package include the following:
- $450 million for the waiver of payroll tax for businesses with payrolls of up to $10 million for three months (the rest of 2019-20) (these businesses will save a quarter of their annual payroll tax bill in 2019-20);
- $56 million to bring forward the next round of payroll tax cuts by raising the threshold limit to $1 million in 2020-21;
- $80 million to waive a range of fees and charges for small businesses including bars, cafes, restaurants and tradies;
- $250 million to employ additional cleaners of public infrastructure such as transport assets, schools and other public buildings;
- more than $250 million to bring forward maintenance on public assets including social housing and crown land fencing; and
- $500 million to bring forward capital works and maintenance.
On the 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:
- Payroll tax waivers for the last four months of this financial year for hospitality, tourism, seafood and exports sectors (Other businesses with payrolls of up to $5 million will be able to apply, based on the impact of virus, to have their payroll tax waived for April to June 2020);
- $20m in interest-free loans 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 and will be interest free, for three years.
- $50m 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; and
- $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.
On the 24 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 including:
- A ‘Business Improvement Scheme’ aimed at helping businesses get customers back into premises by undertaking improvements to a Territory business - all eligible businesses will receive $10,000 - if the recipient also wants to put in their own $10,000, they will then get an additional $10,000 from the Government;
- An ‘Immediate Works Grants Package’ for incorporated not-for-profit and community organisations to undertake repairs, renovations and upgrades to their premises/facilities - applicants can apply for grants of up to $50,000, which will then be matched dollar-for-dollar if the organisation also puts in their own $50,000. Up to $100,000 on a dollar-for-dollar matching basis for amounts above $50,000;
- A ‘Home Improvement Scheme’ with $6000 grants for Territory homeowners and landlords who also contribute $2000 (and a $4000 grant with a $1000 contribution); and
- The freezing of Government fees, charges and electricity prices until 1 July 2021, with electricity prices for SMEs frozen from 1 July 2020 until 1 July 2021.
On 11 March 2020, the South Australia Government announced a $350 million stimulus package that will include current infrastructure projects being brought forward, as well as new projects around road maintenance, housing, tourism and health. The details of the package are not yet available. BDO is monitoring the situation so please continue to check this webpage for updates.
On 20 March 2020, the ACT Government announced a $137 million stimulus package with business measures including the following:
- a one-off six month waiver on payroll tax for affected industries;
- deferral of payroll tax for 12 months for businesses that pay up to $10m in wages;
- $750 rebates to small businesses through their next electricity bill;
- $20m in funding for simple infrastructure works on public buildings;
- rental support of $250 for all public housing tenants, as well as a one-off rebate for residential utility concession holders of $200; and
- a freeze on a number of ACT Government fees and charges, including the fire and emergency services levy, public transport, vehicle registration and parking fees.
Please contact BDO for assistance with navigating the economic stimulus packages that apply to your circumstances and determining your eligibility for the tax and business measures.
BDO can assess your opportunities for each Federal and State incentive, including refunds where possible, and to manage any uncertainties including where engagement with the ATO or State Revenue Offices (SROs) may be needed e.g. taxpayers eligible for grants should ensure that their postal addresses with their respective SROs are correct so that appropriate payments can be received as soon as possible.
BDO can also help you with the development of your whole of business approach to respond to current and emerging issues arising in the current environment as well as with implementation tasks.
As certain incentives in the various economic packages will only be available for a short period of time, businesses should consider taking action as soon as practicable.
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