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2nd April, 2020

Overview: Key stimulus subsidies and tax breaks across the country

Both Federal and State Governments have announced a range of stimulus measures available for companies in the wake of COVID-19. Here’s a summary of what’s on offer to Australian businesses.

Forming a range of stimulus packages specific to each tax jurisdiction, these measures are designed to help bridge the economic gap the novel coronavirus, COVID-19, is creating, thereby offering fiscal assistance to businesses and households impacted by the outbreak.

The various packages, when applied correctly and in combination with sound business management, may be enough to sustain businesses for the duration, keeping workers employed and our economy afloat.

As this information is being changed and updated often, we recommend regularly checking the ATO’s COVID-19 support pages for the most up to date information available.


Australian Federal stimulus measures announced so far


1. The Coronavirus Supplement

The Coronavirus Supplement is an ongoing $550 payment, delivered fortnightly.

Sole traders who receive any of the below payments will also receive the payment:

  • JobSeeker Payment, Partner Allowance, Widow Allowance, Sickness
  • Allowance and Wife Pension
  • Youth Allowance for job seekers
  • Youth Allowance for students and apprentices
  • Austudy for students and apprentices
  • ABSTUDY for students getting Living Allowance
  • Parenting Payment partnered and single
  • Farm Household Allowance
  • Special Benefit

You should enquire with Centrelink about the relevant income tests that apply to your situation.

2. JobSeeker Payment

The JobSeeker Payment is available for any person, including sole traders, who satisfies the Government’s JobSeeker test.

That means you must either:

  • Meet the definition of unemployed and you’re looking for work
  • Be sick or injured and are unable to do your usual work or study for a short time

How much you earn depends on how much you make. As a sole trader, you may still earn some income as a casual or part-time employee, but you’ll need to satisfy income tests.

Further information relating to the JobSeeker payment is available here.

3. JobKeeper Payment

Sole traders are able to claim the Government’s new JobKeeper payment.

Even if a sole trader doesn’t employ anyone, they’re able to access the payment if they meet the eligibility criteria.

In order to access the scheme, business owners must prove a 30 percent or more revenue decline.

Additionally, businesses need to:

  • Register an intention to apply on the ATO website
  • Provide information to the ATO on eligible employees
  • Continue to provide information to the ATO on a monthly basis
  • Pay the full $1500 payment to the respective employee
  • Notify all eligible employees they will receive the payment

Read more about the JobKeeper payment and how it works.

IMPORTANT: You can’t claim the JobSeeker and JobKeeper Payments at the same time.

Click to download MYOB's JobKeeper Cheatsheet.

4. The Instant Asset Write-off

Sole traders can access the increased Instant Asset Write-off.

The Instant Asset Write-off threshold has been increased from $30,000 to $150,000 and expands access to businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.

This measure applies to both new and second-hand assets first used or installed ready for use in the period beginning 12 March 2020 and ending on 30 June 2020*.

*UPDATE: The Government has since extended the applicable period for the Instant Asset Write-off to include assets installed and ready for use until 31 December 2021.

5. PAYG Withholding relief

Where the aggregated turnover of the business is less than $50 million, you are eligible to receive total payments of up to $100,000 (with minimum total payments of $20,000) based on your PAYG withholding obligations for the period 1 January 2020 to 30 June 2020.

The payments are tax free and will be applied as a credit to the BAS account with the ATO upon lodgement of your activity statements from 28 April 2020. Any resulting refund will be paid into the bank account of the business.

The timing of these payments will differ depending on whether you lodge monthly or quarterly activity statements.

6. Assistance for severely affected regions

The Morrison Government has also announced $1 billion to go towards supporting businesses ‘disproportionately affected by the economic impacts of the coronavirus, including those heavily reliant on industries such as tourism, agriculture and education’ according to a recent media release.

‘This will include the waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks. It will also include additional assistance to help businesses identify alternative export markets or supply chains.’

The Australian Government has also discussed the likelihood of further stimulus to be announced at a Federal level in the weeks or months to come, so stay tuned for more.

The Federal Government’s stimulus response is laid out here.

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Australian state-by-state stimulus measures announced so far


Aside from the Australia-wide measures, four Australian state governments have officially released their own stimulus packages.

Across each of the four packages, an unprecedented amount of assistance has been put forward to the SME sector, a move which has been welcomed by small business owners and related associations in each of the relevant states.

New South Wales

Announced by Premier Gladys Berejiklian on 16 March, the NSW Government has released a $3.2 billion stimulus package, $1.6 billion of which will be devoted to stimulating the local NSW business sector.

The Berejiklian government has allocated $80 million of this package to waive fees and charges to small businesses in hospitality and trade industries, and $450 million in payroll tax exemptions for businesses with payroll tax obligations of up to $10 million for three months.

NSW Treasurer Dominic Perrottet assured the state’s
residents that the government was prepared to do “whatever it takes” to make sure that the NSW economy “withstands this storm”.

The NSW Government launched its highly anticipated second stimulus package on 27 March, revealing its plans to increase support for local small businesses, as well as those experiencing significant hardship as a result of the pandemic.

As part of this second lifeline, the NSW state government will be launching a $1 billion ‘Working for NSW fund’ which has been designed to “sustain business, create new jobs and retrain employees”.

While the majority of the fund will be financed through this second stimulus package, it will also hold $250 million of the initial stimulus package announced last week.

The government has also offered businesses that have payrolls of $10 million or less with the option to defer their payroll tax obligations for an additional three months, bringing the total deferment period to six months.

Additionally, any small business with less that 20 employees that leases government-owned buildings will be allowed to defer their rental payments for six months.

Queensland

In what it has been dubbed the ‘Immediate Industry Recovery Package’, the Queensland Government has allocated $27.25 million to a fund that will assist its local economy with ‘recovery strategies’ that directly deal with the impacts of COVID-19.

Not unlike the NSW stimulus package, this recovery strategy waives a series of fees and charges for Queensland-based small businesses in the hospitality and tourism industries.

In addition to the recovery package, Queensland’s Premier Annastacia Palaszczuk announced the opening of a $500 million loan facility for businesses who need a boost in cash flow as a result of negative impacts stemming from the coronavirus.

Loans will be capped at $250,000 and will be interest-free for 12 months.

The Queensland State Government has also offered payroll tax deferrals to SMEs who have been affected by the pandemic – an offering that has already been taken up by almost 300 small businesses.

Western Australia

WA’s version of the COVID-19 stimulus package was launched by Premier Marc McGowan on 16 March, with a dedicated $607 million of relief being offered to the state’s residents.

While the lion’s share of this budget will go towards freezing household bills for WA’s residents, $114 million will be going towards additional measures to support small businesses – including a one-off payment of $17,500 to small businesses that pay payroll tax.

The WA Government has also allowed business impacted by the pandemic to defer their payroll tax payments until 21 July, later this year.

South Australia

Premier Stephen Marshall came out with a $350 million stimulus package, highlighting in his statement that it was there to combat the issues brought on by coronavirus, bushfires and droughts in the region.

On 26 March, Premier Marshall announced $650 million was to be added to the state’s existing stimulus package, bringing the total value of its COVID-19 support to $1 billion.

In an announcement far more detailed than his initial one earlier this month, Marshall pledged to allocate large portions of the updated package to support businesses in Australia’s south.

He committed to release $300 million to support business facing collapse in heavily impacted industries, $60 million in payroll tax relief, and to wave liquor licensing fees across the board.

An additional $30 million will also be used to make payments to the unemployed.

Victoria

Premier Daniel Andrews launched the first of a three-staged stimulus initiative, amounting to $1.7 billion in rescue funds for the Victorian economy.

As part of this stimulus package, Andrews pledged to release $550 million to refund any payroll tax payments made by small Victorian businesses during the 2020 financial year.

The Premier reiterated that this payment was a “refund”, not a “tax-cut”.

An approximate 24,000 Victorian SMEs stand to benefit from this refund, and the average saving amount across all of the recipients is expected to be about $23,000.

What’s the eligibility criteria for the Victorian Business Support Fund?

  • If you’re a small business employer
  • If you’ve been subjected to closure or highly impacted by lockdown measures
  • If you have turnover more than $75,000 and payroll less than $650,000

You can find further details and apply for the Business Support Fund on the Business Victoria website.

The Victorian government also announced that local SMEs will be able to delay their payroll tax obligations for the first few months of the 2021 fiscal year as well.

For the second stage, the state government announced that it would be releasing a further $500 million for a series of grants and payments to businesses that “really are doing it tough”.

Phase three is set to be the largest of the lot, with $600 million being extended to the Victorian economy – part of which will be used to waive liquor licence fees across thousands of venues, as well as to provide assistance to those who will have lost their jobs.

Tasmania

The Liberal Government of Tasmania unveiled $420 million of stimulus lifelines, a large portion of which has been dedicated to boosting its local small businesses.

Among the various initiatives put forward by the Tasmanian government, the two most notable ones were a three year interest free loan to SMEs in industries that have been heavily impacted, and a range of payroll tax exemptions for the remaining four months of the 2020 financial year.

Payments of up to $1,000 will be made to families who are required to enter into self-isolation as a result of the virus.

Australian Capital Territory

Chief Minister of the nation’s capital Andrew Barr announced a $137 million stimulus package late last week, reassuring the small state that additional packages were on the way still.

In this first economy booster, Barr divided his assistance between households, business and community. Some of the highlights of this package included the following benefits for ACT based businesses:

  • The opportunity for businesses that pay up to $10 million in wages to defer payroll tax payments for 12 months
  • Directly affected industries like hospitality and tourism will be receive a six-month payroll tax waiver
  • Licenses and fees waived for hospitality businesses
  • A $2,622 credit to commercial rates bill
  • A rebate of $750 to small businesses which will be paid through their upcoming electricity bill
  • Clubs to receive funding to continuing employing their casual staff
  • Reshuffling of jobs in local government so those who work in events and entertainment can maintain their jobs by working in other parts of government

As a result of all of the economic unknowns associated with this pandemic, the ACT local government decided to postpone the release of its annual budget to later in the year.

Northern Territory

Despite dealing with a significant amount of debt and economic strife, NT’s Chief Minister Michael Gunner released a $60 million stimulus plan, $20 million of which was allocated to businesses.

As part of the territory’s Business Improvement Scheme, eligible business will receive a payment of $10,000 and a further $10,000 in matched funding to pay for business upgrades.

Gunner also announced that $5 million was being spread across hospitality and entertainment businesses who needed to readjust their venues in order to accommodate the 100 person limit that was introduced by the Federal Government.

If your business is impacted by COVID-19 and you’re looking for assistance on any matters related to business finance and taxation, we recommend consulting with an accredited tax agent as soon as possible. Click here for specialist advisors near you