Just a few days after the Australian Government announced its first stimulus package to help small businesses stay afloat and keep people employed, a second stimulus package has been announced. This $66.1 billion stimulus package sees the addition of new measures designed to help Australians cope with the devastating economic impacts of the Coronavirus.
Keep reading to find out what additional measures are available.
Boosting Cash Flow for Employers
Small and medium businesses may be eligible to receive a payment of up to $100,000. This payment is designed to assist businesses with their cash flow to allow them to maintain operations, retain staff and help cover the cost of rent and bills.
Eligible employers will receive a payment equal to 100% of their salaries and wages withheld (previously 50% in the first stimulus scheme). The maximum payment has been increased to $50,000 (previously $25,000). The minimum payment has also been increased to $10,000 (previously $2,000)
This payment will be tax-free and will be available from 28 April, 2020. Payments will flow automatically through the Australian Taxation Office.
Temporary Financial Relief For Businesses
This relief aims to help businesses facing temporary financial distress due to the Coronavirus by creating a safety net to ensure they are able to operate once the crisis has passed. The hope of this package is to minimize the threat of actions that could unnecessarily push companies into insolvency and force the closure of the business.
This relief builds on the support from the first stimulus package which included: increasing the instant asset write off, backing business investments and supporting apprentices and trainees.
New additions to this package include:
- Temporarily increasing the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000 for a period of 6 months
- Temporarily increasing the time companies have to respond to statutory demands from 21 days to 6 months. This will also apply for a period of 6 months
- Proving temporary relief to directors from any personal liability while trading insolvent.
- Temporarily amending the Corporations Act 2001 to provide targeted relief for companies to deal the unforeseen results of Coronavirus
Job Keeper Payment
This payment scheme provides temporary relief for businesses affected by the Coronavirus. Eligible employers can apply to receive a payment of $1,500 per fortnight for each eligible employee for a period of 6 months. This payment is also available to eligible employees that have been let go and re-hired during the months surrounding the outbreak.
To be eligible, businesses with a turnover of less than $1 billion must have had their turnover reduced by more than 30 per cent compared to last financial year. Businesses with a turnover of over $1 billion will be eligible if their turnover is reduced by at least 50 per cent.
Eligible employees include those aged 16 over who were employed at 1 March 2020 and were either full-time, part-time or long-term casuals for a period of at least 12 months.
COVID Safe Harbour
This relief was introduced by the Federal Government on 22 March 2020 and aims to provide further relief for financially distressed businesses. To secure the benefit of COVID safe harbour, a company director must ensure that any debts incurred are necessary to facilitate the continuation of the business during the COVID Safe Harbor period. This includes a director taking out a loan to move business operations online and any debts incurred by continuing to pay employees during the course of the pandemic.
For further information regarding COVID-19 Safe Harbour, click here.
There is no doubt that the Coronavirus is causing devastating financial impacts on countless Australian businesses. Give your business the best possible chance at success during this difficult time by utilizing the support available from the Government stimulus packages.
For further information on the financial assistance available, click here.
If you feel that your business will not make it through the current crisis, get in touch with Insolvency Experts. With over 30 years of experience, we provide low cost company liquidation. Our free, no-obligation phone consultations are available to answer all your questions, outline all options that are available to you and execute the best solution for your company moving forward.
Call now 1300 767 525 and speak directly to an expert!