The following is designed as a resource for Victorian businesses to access information on the support available to them via the various government agencies and lending institutions.

Federal Government Support

The Federal Government has announced several support mechanisms although the two key assistance packages that are going to provide the greatest support to your SME are:

  • PAYG Cash Flow Assistance

  • JobKeeper Payment

PAYG Cash Flow Assistance

If you have an annual turnover of less than $50 million and you employ staff between 1 January 2020 and 30 June 2020 you will be eligible for up to $100,000 (minimum $20,000) of cash flow support.

You don’t need to do anything to access this, it will be automatically calculated and paid into your account based on your PAYG lodgements.

The ATO have provided a Fact Sheet with some more information and a few illustrations on how the subsidy will apply.

Jobkeeper Payment

The JobKeeper Payment is a wage subsidy of $1500 per employee per fortnight (for up to six months). It applies to all full time, part time and any casual employees who have been on the books for more than 12 months.

You will qualify for this if your turnover is under $1 billion and your turnover will be reduced by greater than 30% from the comparable period last year.

You do need to register with the ATO if you wish to apply for this subsidy, if you would like any assistance with this then please feel free to contact us.

A Fact Sheet on the JobKeeper Payment can be downloaded here.

Code of Commercial Leasing

Although not a direct subsidy, the Federal Government had directed that measures be put in place to protect commercial tenants during the Coronavirus pandemic. The key principles of the code seek to provide:

  • An obligations for landlords to and tenants to negotiate in good faith

  • Arrangements for rental waivers and deferral that are proportionate and appropriate based on the impact of the COVID-19 pandemic plus a reasonable recovery period (with a minimum of 50% being waivers)

  • A requirement for landlords to pass on a proportionate share of any government or bank support they received (i.e. land tax reductions and loan payment deferrals)

The full details of the Code can be downloaded via this link.

Victorian State Government Support

The Victorian Government has released an Economic Survival Package to compliment the Federal initiatives, the key benefits of the package include payroll tax refunds / relief and a specific Business Support Fund to assist businesses that may be missing out on the benefits of the Federal assistance packaged.

Payroll Tax Refunds

The SRO is administering payroll tax refunds/relief for the 2020 financial year. To qualify you need to have a payroll of under $3 million to SMEs with payrolls under $3 million.

From a cash flow perspective this could be a needed cash injection into your business equal to the payroll tax you have paid from 1 July 2019 onwards.

Business Support Fund

The State Government has announced a $500 million Business Support Fund for business in the hardest hit sectors (including hospitality, retail and tourism).

Applications are now open and eligible businesses can apply for a one off $10,000 grant which can be used towards costs such as utilities, rent and salaries, and activities to support business continuity planning.

Bank Support Packages

Another useful Federal Government initiative is the government-guaranteed loans to help businesses access working capital up to $250,000 at an interest rate of 4.5% per annum and no interest for the first six months.

Banks are beginning to bringing out products to offer these government-guaranteed loans although the key to accessing them will be up to date financial information and cash flow projections.

In addition to government-guaranteed loans, banks have each provided support measures such as payment deferrals and reduced interest rates to assist businesses. The following links will take you to the specific offerings from each of the major banks:

ATO Support

The ATO is proactively seeking to engage with businesses and willing to enter into payment arrangements for both pre existing and current tax debts. If you have liabilities to the ATO now is the time to get in touch and negotiate a payment arrangement that can work with your current circumstances.

Other elements of the ATO support package include:

  • Refunding PAYG installments paid over the September 2019 and December 2019 quarters.

  • Remitting interest and penalty incurred after 23 January 2020

  • Deferring your March BAS by up to four months

Additional information on ATO support for business can be found here.

Solvency Support

In an effort to prevent widespread insolvency appointments from directors protecting against personal liability the Federal Government has made temporary amendments to the Corporations Act to:

  • Temporarily relieve directors of their duty to prevent insolvent trading with respect to debts incurred in the ordinary course of business. This will relieve the director of personal liability from insolvent trading over the next six months.

  • Amend the statutory timeframe for a company to respond to a statutory demand will be extended temporarily from 21 days to six months.

  • Raise threshold at which creditors can issue a statutory demand on a company will be increased from $2,000 to $20,000.

The solvency support are targeted at supporting SME's to emerge post the current implications of the Coronavirus pandemic.