22 March 2020 – VTIC – Chief Executive’s Coronavirus Update #9
This weekend has been an unimaginable roller coaster ride.
There were high notes that came in the form of the incredibly generous state and federal economic relief packages to support businesses to stay afloat. These announcements were coupled with the challenging advice from the Prime Minister foreshadowing the cancellation of all non-essential domestic travel by the National Cabinet and the advice from the Premier of Victoria that all non-essential services will be closed from Tuesday. This move will see schools, restaurants, pubs, retail shops and salons in our state shut down in an effort to contain the impacts of COVID-19.
These collective decisions all but halt our sector and mean that any hope over the Easter season of recovering losses endured during the January bushfires have largely slipped away.
We now need to focus on making sure the industry is accessing all the support they may be eligible for from the packages announced this weekend by the state and federal governments.
I just wanted to do a brief summary here for you of what’s been announced over the past two days –
$1.7 billion Victorian Government relief package announced on Saturday 21 March
- Payroll Tax Relief for businesses with payroll under $3 million
- Refund of payroll tax paid by eligible businesses backdated to 1 July 2019
- Deferral of future tax for the current financial year.
- Cash allocations of $113,000, with an average payment of $24,000, to 24,000 Small to Medium Enterprises (SMEs) who together employ over 400,000 people in Victoria (eligibility criteria to be determined).
- $500 million Business Support Package for industries hardest hit by the impacts of coronavirus –
- Namely tourism, hospitality, accommodation, events and the arts
- VTIC will be engaging with government to ensure that our industry is well represented as the elements of this package are shaped and refined.
- $500 million to look after displaced workers and workers that have been stood down
- Government has introduced a register to match the skills of displaced workers with other businesses looking to gear up in the current environment
- You can access this register here www.vic.gov.au/workingforvictoria
- $100 million allocated to remove rent obligations for commercial businesses that operate in government properties.
- Waiving of liquor licensing fees.
- The Treasurer has implemented that all invoices due to businesses for services provided to government agencies must be paid within 5 days to improve cash flow.
- Land Tax Relief
- Land holdings of less than $1 million will receive a reprieve on payments for this year and a liability deferral out to 2021.
$66 billion support package announced by the Federal Government on Sunday 22 March
Today the Prime Minister announced a further support package to assist small businesses to stay in business and help keep core staff employed. This is in addition to the $17.6 billion package announced on Thursday 12 March. Over the last 10 days, these economic support measures represent $189 billion overall, or nearly 10 per cent of the nation’s total economy.
Key highlights include –
- Cash payments of between $20,000 and $100,000 for SMEs and Not-for-profits (NFPs) with annual turnover of up to $50 million
- All employing small businesses will have access to at least $20,000 in payments and 30,000 NFP businesses can also access this payment
- These funds will be allocated through the existing tax system and will commence from Tuesday 28 April 2020.
- The Commonwealth will guarantee unsecured loans of up to $250,000 for a term of three years with no repayments for the first 6 months
- This is a $40 billion scheme agreed with the Australian Banking Association to commence in early April
- The Commonwealth will guarantee 50% of this $40 billion loan scheme
- This measure is in addition to the announcement last week by the Australian Banking Association agreeing to a 6-month loan deferral to support financial pressures felt from the impacts of COVID-19
- Operators are encouraged to contact their banker urgently to commence discussions around accessing these loans and payment deferral facility.
- New Wage Subsidies for workers who have lost their jobs or been stood down
- Households, including casuals and sole traders, will have access to this financial support that will see a doubling of the Job Seeker Allowance (previously New Start payments) to just over $1100 a fortnight
- The normal asset test and waiting periods will be waived.
- From Monday 13 July 2020, additional $750 payment for people on income support
- 5.2 million Australians will be eligible for this payment.
- Access to Superannuation
- $10,000 in this current financial year and a further $10,000 in the next financial year can be accessed tax free
- Casuals and sole traders who can show their hours or their income have decreased by 20% or more are eligible for this benefit
- This measure will bring $27 billion of superannuation back into the pockets of Australians now.
ALL OF THESE MEASURES WILL BE IN PLACE FOR A PERIOD OF 6 MONTHS AND MORE PACKAGES ARE ANTICIPATED TO BE ANNOUNCED.
The National Cabinet is meeting this evening to consider further restrictions and safety measures and VTIC will continue to follow these developments and keep you updated.