JobKeeper – supporting business to retain their people
The ‘job keeper’ payment to Australian employers is worth $130 billion and is focused on supporting businesses in retaining wages for their employees. With increased social distancing measures closing further businesses over the last week and more Australians limiting their spending as a result of staying home, many small businesses have either had their cashflow cut off or significantly reduced. The ‘job keeper’ program will allow these businesses to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for up to six months.
This financial support will allow businesses to continue to pay staff a wage so that when the crisis is over, they are better positioned to restart. Full details are available in the Treasury’s JobKeeper payment – Information for employers fact sheet.
Boosting cash flow for employers
Up to $100,000 was announced on 12th March to allow eligible small and medium-sized businesses and not for profits who employ people. In the Apr-Jun 2020 quarter “Under the enhanced scheme, employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000.” The same will apply for the Jul-Oct 2020 period.
Temporary relief for financially distressed businesses
During this period of disruption, many otherwise profitable and viable businesses could face temporary financial distress. The Government has created a safety net to support businesses to remain viable when the crisis is over by:
Under the Coronavirus SME Guarantee Scheme, the Government aims to enhance the lender’s willingness and ability to provide credit by:
Stability for commercial rental agreements
On Sunday the 29th of March, the Government also announced that evictions will be put on hold for 6 months by the states and territories. They encouraged landlords and renters to discuss short term agreements and positioned that the pain being felt in these conditions should be shared between renters, landlords, lenders and the Government. More details were promised for later in the week.
Increasing the instant asset write-off
Business with an annual turnover of less than $500 million has until 30th of June to instantly write-off asset purchases up to $150,000.
Backing business investment
Up to 30 June 2021, businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
Supporting apprentices and trainees
Wages subsidies are available for up to 50 per cent of an apprentice’s or trainee’s wage from 1 Jan to 30 Sep 2020. This is available to existing employers, or where they are not able to retain the apprentice or trainee, the subsidy will be available to a new employer, up to $21,000 per eligible apprentice or trainee over the three quarters.
Support for significantly affected regions and communities
$1 billion has been set aside to support regions most affected by the Coronavirus outbreak, both during the period and the following recovery.
In addition, tax relief has been offered to the airline industry.
Additional Government resources and support
The information about COVID-19 is changing quickly and the best way to stay up to date during this time is by downloading our app in the app store (just search for ‘Invest Blue’) and checking our newsfeed. You can also head straight to the website and monitor our Market Updates and Insights and News pages. For our clients, we recommend you regularly check your emails and ensure your email address and details are up to date with us. You can update your details by emailing email@example.com.
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What you need to know
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