Commonwealth adds another layer of business aid

The Commonwealth Government has announced a raft of measures to assist businesses as part of the second stage of its economic plan to cushion the impact of the coronavirus. It came as the National Cabinet yesterday agreed to move to more widespread restrictions on social gatherings, forcing a shutdown of venues like pubs, gyms and restaurants (apart from takeaway). A total of $189 billion is being injected into the economy by all arms of Government in order to keep Australians in work and businesses in business. This includes $17.6 billion for the Government’s first economic stimulus package, $90 billion from the RBA and $15 billion from the Government to deliver easier access to finance, and $66.1 billion in the second stage of the economic support package. Prime Minister Scott Morrison said the Government was acting to cushion the blow from the coronavirus for businesses and households to help them get through to the other side of the crisis. “We want to help businesses keep going as best they can and for as long as they can, or to pause instead of winding up their business. We want to ensure that when this crisis has passed Australian businesses can bounce back,” he said. Prime Minister Scott Morrison. Assistance to business to keep people in a job The government is providing up to $100,000 to eligible small and medium sized businesses, and not‑for-profits (including charities) that employ people, with a minimum payment of $20,000. Under the enhanced scheme from the first package, 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 payment will be available from 28 April 2020. By linking the payments to business to staff wage tax withholdings, businesses will be incentivised to hold on to more of their workers. This measure is expected to benefit about 690,000 businesses employing around 7.8 million people, and around 30,000 NFPs (including charities). Small and medium business entities with aggregated annual turnover under $50 million and that employ workers are eligible. An additional payment is also being made from 28 July 2020. Eligible entities will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments received. Regulatory protection and financial support to stay in business The government will establish the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SMEs) to get access to working capital to help them get them through the impact of the coronavirus. Under the scheme, the government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs. The government’s support will enhance lenders’ willingness and ability to provide credit to SMEs with the scheme able to support $40 billion of lending to SMEs. The government will guarantee up to $20 billion to support $40 billion in SME loans. Providing temporary relief for financially distressed businesses The government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive. The package also includes temporary relief for directors from any personal liability for trading while insolvent. The Corporations Act 2001 will be amended to provide temporary and targeted relief for companies to deal with unforeseen events that arise as a result of the coronavirus.

Commonwealth adds another layer of business aid

Industry Queensland

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