As expected, further business stimulus packages have been announced. The Federal Government has realised that the initial package offered was not sufficient to target all the various types of Small Businesses in Australia. In particular, Sole Traders were inadvertently ignored – but this has now been addressed.
This morning, the Prime Minister Scot Morrison announced further assistance to support Businesses and Jobs for Australia. This will be fast tracked at a meeting of Cabinet happening tonight instead of later this week.
The package announced is estimated to be worth approximately $66 Billion and can be summarised as follows:
An Unsecured loan of up to $250,000 will be made available for Small Businesses that have been affected by COVID-19. These loans will be interest free for a period of 6 months and can be for up to 3 year terms.
The mechanics of this will be delivered to you as more information is released.
Support for Small Business
Last week, small business was promised up to $25,000 (with a minimum of $2,000) to be paid through the lodgement of Activity Statements. This has now been upgraded as follows:
- Minimum payment is increased to $10,000 (previously $2,000) including Not For Profits. This is based on 100% of the PAYG Withholding amount reported on Activity Statements from January to June 2020 – tax free.
- Maximum amount tax free available is $50,000 (up from previously advised $25,000)
- An additional payment equal to this amount will be available from July to October 2020, taking total available payments to $100,000
- Credits will start from late April 2020 and eligible employers established prior to 12 March 2020.
This highlights the importance to stay close to us over the coming weeks so as that we can get your activity statements prepared and lodged promptly in order for you to maximise on these benefits. There will be additional work required to ensure that your credit is applied to your account promptly – we are continuing to work and will make sure this become a high priority in our workflow.
Cash for Welfare Recipients
The last announcement was for $750 to be paid to recipients of Welfare to be paid on 31 March 2020. This has now been extended to a further payment of $750 to be paid on 13 July 2020
On top of this, Sole Traders & Casual workers (who meet the income tests) will qualify for the additional funds that are currently available to Job Seekers. It was announced that the Newstart payments (payment to Job Seekers) will temporarily double which will provide an additional $550 per fortnight for the recipients. It is expected that these additional payments will continue for some time.
Sole Traders and Casual workers will be required to demonstrate a reduction in their income and WILL NOT be required to meet the assets test or wait for the qualifying periods. This will be waived to ensure that prompt payments can start for all recipients of these welfare payments.
Access to Superannuation
Whilst this should be considered as a last resort, people can now access up to $10,000 from their superannuation funds in the current financial year, and a further $10,000 in the new financial year. These payments will be tax free
Further to this, those currently receiving pension payments from their superannuation funds, will have a temporary reduction of 50% in the amounts that they are required to draw down from their Account Based pensions for the 2019-20 and the 2020-21 financial years.
The mechanisms for all the above is unclear – please rest assured that we are continually monitoring the news and releases and will bring them to your attention as soon as they come available.
The team at MKS Group will be moving to working remotely from Tuesday 24 March 2020. We anticipate that this will not have any impact on the service we offer you and it will be business as usual. All our team members can be contacted directly by email, or by telephoning the office number 03 9374 8400 and your call will be directed to the required team member. Be patient with us if there is a delay from our team reaching you.
I stress this again – the team at MKS Group are totally committed to providing you with as much knowledge, information and assistance that we possibly can. Your business success and continuity is important to us and to you and we will work with you to battle these turbulent times together.
As always, please feel free to reach out to us at any time and we will do our best to help.
In the event that you are unsure who to speak to within our team, simply send an email to firstname.lastname@example.org and we will get the right person to call you.