Stimulus package unveiled to support small business

Sole traders, casual workers, retirees and those on income support have all been offered assistance in a $66 billion stimulus package announced in a join release by Prime Minister Scott Morrison and Treasurer Josh Frydenberg on 22 March. This is the second stage of its economic plan to cushion the economic impact of the virus and help build a bridge to recovery.

The support includes:

• Coronavirus supplement

Time-limited coronavirus supplement to be paid at $550 per fortnight, for the next six months, to existing and new recipients of the JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit. Anyone eligible for the maximum jobseeker payment will now receive more than $1100 a fortnight.

The asset test and waiting period have been waived to allow those out of work to access support sooner. Income tests will still apply, with those earning less than $1075 a fortnight being eligible for the full benefit. 

• Payments to support households

$750 will also be made available to social security and veteran income support recipients and eligible concession card holders. This is in addition to the $750 stimulus package announced on 12 March.

• Boosting Cash Flow for Employers

In order to keep staff on the books and to pay their rent and rates, small businesses will receive a tax-free cash payment of up to $100,000, with the minimum payment for eligible business being $20,000. There will be no new forms and payments will flow automatically through the ATO.

Available from 28 April, eligible employers will receive a payment equal to 100% of their salary and wages withheld, with the maximum payment being increased from $25,000 to $50,000. The minimum payment has been increased from $2,000 to $10,000.  By linking payments to business to staff wage tax withholdings, it is hoped businesses will be inclined to hold onto more of their workers.

• Superannuation

Anyone in financial distress caused by the coronavirus will have access to up to $10,000 of their superannuation in the 2019/20 financial year and a further $10,000 in 2020/21. Eligible individuals will be able to apply online through myGov for access.

There is also a temporary reduction in the superannuation minimum drawdown requirements by 50% for 2019/20 and 2020/21.

• Coronavirus SME Guarantee Scheme

The Government will guarantee 50% of new loans issued by eligible lenders to SMEs. The aim here is to improve access to working capital and enhance lenders’ willingness and ability to provide credit to SMEs.

• Temporary relief for financially distressed businesses

The Government is temporarily increasing the current minimum threshold at which creditors can issue a statutory demand on a company from $2000 to $20,000, and the timeframe for companies to respond to statutory demands has been temporarily extended from 21 days to six months. The package also includes temporary relief for directors from any personal liability for trading while insolvent.

Speak to our team

There are several ways in which we may be able to help. It’s always important to get good advice and that’s particularly true in turbulent times. If you need help please talk to us on 1300 448 303 or use our online enquiry form. We can offer initial consultations, advice and support over the phone if you have any concerns about face-to-face meetings.

And please feel free to share this information with your customers to help them plan their business affairs during these challenging times.

 March 2020

Date published 23 Mar 2020