State-By-State Support for Small Businesses Explained
The COVID-19 virus has in short order presented the worldwide economy with an existential threat. In response, federal and state governments have spurred a number of stimulus packages into action, in the hope that small businesses can weather the storm and continue to operate as a vital function of the Australian economy. It can be tricky to find exactly what this means for your state or territory, as well as your industry, so we’ve listed them in our report below.
New South Wales
For Australia’s most populous state, New South Wales has elected to waive payroll tax up until the end of the financial year, with a high likelihood this will be extended past the three-month mark. This payroll tax waiver is available to businesses that have a payroll of up to $10 million, and will be applied automatically when tax details are submitted to the ATO. NSW is also going to bring the payroll tax threshold up to $1 million in the 2020-21 financial year.
On top of this, the state government has elected to eliminate fees and charges for businesses it deems extremely vulnerable, such as tradespeople and the hospitality sector; this is set to expand as the government continues to roll out more stringent restrictions on businesses operating to curb the spread of the virus. $80 million has been allocated to fund the waiving of fees for small businesses, and will be facilitated by Service NSW.
Finally, there has been an announcement of $250 million to expedite the delivery of maintenance on public assets like social housing, and $500 million to fast-track capital works and maintenance. These measures are expected to give a number of small and medium sized businesses and contractors employment, likewise for the additional $250 million pledged to employ cleaning staff for public transport, schools and public infrastructure.
Victoria has announced a $1.7 billion stimulus package, which includes the same payroll tax measures as NSW. Organisations with a payroll less than $3 million will be able to apply for a full refund of that tax for the 2019-20 financial year; payments are scheduled to kick in this week on an automatic basis. Small businesses will also be able to defer their payroll tax payments for the first quarter of the 2021 financial year; payments will be due in January 2021.
The state has also established a business support fund, aimed at supporting industries hit particularly hard by the pandemic, such as the hospitality, entertainment, retail, accommodation and tourism industries. The government has provided few details and hasn’t elaborated exactly how this fund will provide support for those businesses, but has said that payments will be administered in collaboration with the Australian Industry Group, Victorian Chamber of Commerce and Industry, as well as the Australian Hotels Association.
Victoria has also set up a half-a-billion-dollar ‘Working for Victoria’ fund, that will help find employment for workers. Finally, the government has said it will pay supplier invoices within five business days, and has allowed commercial tenants in government buildings the possibility of rent relief, as well as deferring land tax payments for businesses.
Queensland has announced it will give payroll tax relief and deferrals for employers paying less than $6.5 million in taxable wages, in addition to a three-month payroll ‘holiday’. Businesses exceeding the threshold that can prove they’ve been impacted by the pandemic can also apply for this refund, or deferral in payment.
The state government has also announced low-interest loans of up to $250,000- interest free for the first year, in the hope businesses can ride out the damage of the virus and maintain operations. The Queensland Rural and Industry Development Authority is vetting these loans, and businesses can contact them here.
In addition, there’s grants of anywhere between $2,500 - $50,000 for small businesses and farmers which will begin taking applications in April. The government has confirmed it will waive a number of fees for small businesses, such as liquor licenses, commercial activity permits, tourism rental payments and registration for tour operators, and will roll out a mentoring program for small businesses to cope with the changing landscape, assisting them with business planning and financial management.
The South Australian government is yet to release the full details of its stimulus and business support packages, but we do know that the government has pledged $350 million to support businesses and guard the economy. The government has also announced $50 million of new projects, like road and hospital upgrades, as well as tourism infrastructure to encourage jobs and contractors. To be eligible for this funding, the proposed projects must include a large amount of materials and supplies to be purchased, and be able to launch in a small timeframe.
Western Australian small businesses with a payroll between $1- 4 million are now eligible for a grant of $17,000, which will be paid automatically by cheque in July. Smaller businesses with a payroll less than $1 million will be exempt from paying any payroll tax from July 1. Organisations with a payroll exceeding $7.5 million have the ability to defer any payroll tax until July 2020.
Tasmania said told small businesses that they’ll be waiving payroll tax for the hospitality, tourism and seafood industries, which will include the last four months of the 2019-20 financial year. Larger businesses with a payroll of up to $5 million will be able to apply for the waiver, with the government reserving the right to determine just how badly the business was impacted by the COVID-19 virus. In addition, Tasmania will be offering $20 million in interest-free loans to small businesses in the aforementioned impacted industries, as well as businesses with a sub $5 million turnover to restructure its operations and purchase equipment. These loans will be interest-free for 38-months.
A range of fees have been removed for licencing and leases paid by small businesses, which includes a half-price liquor licensing fee, waiving fisheries fees for a year, and eliminating park entry fees for tourism operators in Tasmania. The state government has said that a number of grants up to $5,000 will be made available to businesses, encouraging the hiring of apprentices and trainees, and a youth employment scheme will be rolled out to encourage small businesses taking on young employees with the benefit of a one-year rebate on payroll tax. Finally, Tasmania has allocated $50 million of investment into local projects, such as maintenance on public buildings and infrastructure to support local trade businesses.
The Northern Territory’s government has launched a $50 million ‘Small Business Survival Fund’ which has been set up to allocate grants to small businesses, and help them establish online stores and other changes to its structure in the wake of the virus. This is in addition to a $20 million business improvement scheme, which will hand out grants of up to $10,000 to provide new equipment and aesthetic changes to a business. The state has said that if a business owner contributes $10,000 of their own funds, the government will double its contribution, for a total of $30,000 in funding for that business.
The government has also urged banks to become more flexible with their deals with businesses, and has asked landlords to reduce, defer or freeze rents for businesses that could be impacted.
Australian Capital Territory
Finally, the ACT is handing out a one-off payroll tax waiver for the hospitality industry for six-months between April and September, 2020. The government has also said that businesses with a payroll of up to $10 million will be able to defer their payments, interest-free until July 1, 2022. To assist the hospitality industry, registrations and liquor licensing fees will be waived for one year from the 1st of April. Licensing fees for rideshare operators and taxi plates will also be waived for one year. This is in addition to businesses that are using less than 100-megawatts of electricity per year who will be eligible for a $750 rebate.
The ACT has announced $20 million in infrastructure and maintenance projects to spur job creation, and this funding will be made available for jobs with an immediate start date, that employ local workers and utilise local suppliers for the job. Finally, the ACT has increased subsidies for apprentices and traineeships, as well as launching a business liaison hotline - 6205 0900 - which is set up to offer small businesses advice, business management coaching and support services. Business owners are eligible for four-hours of personalised advice, as well as access to online resources for free.