As I am sure now most of you are aware that the economic stimulus surrounding Coronavirus is a rapidly evolving offering.
With new information being released constantly by both the State and Federal Governments we are endeavouring to update information as regularly as possible on our blog.
Be sure to keep checking back in here regularly to find updates and clarifications as these stimulus packages roll out.
Should you require further clarification we are happy to discuss a tailored review for your business. Please see my contact information at the end of the post for how to get in touch.
As an alternative to blog updates we are now offering webinars as a way to access information.
On 6th March we held a live webinar which covered off on a lot of the information that I have been sending out via email. If anyone is interested they can watch it here
This does not cover off on the JobKeeper payments as we will be doing a stand-alone Webinar tomorrow at 10am in conjunction with Karen Hillen from Hillen Staff Solutions. You can register for this webinar here.
Once registered you will receive the webinar login details (please don’t share with Hamish Blake…actually sure why not).
NSW Small Business Support
The NSW Government will put $750 Million into a Small Business Support Fund, the same fund that was rolled out during the bushfire crisis, to provide grants of up to $10,000 to eligible businesses. The grant relief is far more narrowly targeted than recent Federal announcements, but many NSW businesses will still qualify, and the $10,000 could make all the difference in surviving the next few months.
To be eligible, businesses will need to:
- Have between 1-19 employees and a turnover of more than $75,000;
- Have a payroll below the NSW Government 2019-20 payroll tax threshold of $900,000;
- Have an Australian Business Number as at 1 March 2020, be based in NSW and employ staff as at 1 March 2020;
- Be highly impacted by the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 issued on 30 March 2020 (see further info here);
- Use the funding for unavoidable business costs such as utilities, overheads, legal costs and financial advice; and
- Provide appropriate documentation upon application.
While the term “highly impacted” is yet to be made clear, the Sydney Morning Herald is reporting a 75% revenue loss as a possible threshold.
Applications for a small business grant of up to $10,000 will be available through Service NSW within a fortnight and remain open until 1 June 2020.
JobKeeper Eligibility Update
There have been many questions about who is and is not eligible for the JobKeeper Payment.
The intent of the JobKeeper Payment is to enable any eligible self-employed person get a wage subsidy regardless of what business structure they use. Further clarification now states that:
- Where the partners in a partnership only receive a share of profits – only one partner can be nominated to receive it;
- Where the directors of a company only receive dividends – only one director can be nominated to receive it; and
- Where the beneficiaries of a trust only receive distributions – only one individual beneficiary (i.e. not a corporate beneficiary) can be nominated to receive it.
Parliament will sit tomorrow, Wednesday 8th April to pass the required legislation. In the meantime Treasury have put out a list of frequently asked questions and answers which is a very useful resource. You can access this via the button below. If you have any specific questions please get in touch.
Free Childcare During The Pandemic
The Federal Government will pay 50 per cent of the child care sector’s fee revenue up to the existing hourly rate cap based on a point in time before parents started withdrawing their children in large numbers, but only so long as services remain open and do not charge families for care. The funding will apply from 6 April based on the number of children who were in care during the fortnight leading into 2 March, whether or not they are attending services. The new system will see payments start flowing at the end of next week. The system will be reviewed after one month, with an extension to be considered after three months.
For anyone in the child care industry, please get in touch to discuss in detail, however for families this means that they are able to access free care for their children. Unlike the Child Care Subsidy, there is no means test. There will be priority of places given to children whose parents need to continue working, vulnerable children, and children who were previously enrolled in the centre. The changes also mean parents who chose to keep their children home, can maintain their place at the centre without paying fees.
Tweed Shire Council Package
Locally the Tweed Shire Council have announced a $600,000 support package providing assistance to households and businesses. Measures include:
- Deferral of two quarters (Q4 2019/2020 and Q1 2020/2021) of rate instalments on application for residents and businesses that can demonstrate that have been negatively financially impacted by COVID-19. The deferral will attract zero interest and will be repayable over a two-year period from Quarter 2, 2020/2021. (Estimated cost to Council – $205,000);
- Waiver/rebate of all outdoor dining fees for 12 months (est. $90,000);
- Rebate of annual airfield lease for commercial businesses directly affected by COVID-19 aviation downturn at the Murwillumbah Airfield for 2020 (est. $30,000);
- Fifty per cent reduction for cattle saleyards for 2020 (est. $5,000);
- 80 per cent rent reduction for Visitor Information Centres for the duration of the pandemic (est. $32,000);
- Waiving licensing fees at the Tweed Marina for 2020 (est. $138,000);
- Waiving/refunding booking/licence fees for Council facilities, venues or parks for 2020 (est. $100,000);
- Waiver of development application fees relating to the COVID-19 emergency for 12 months commencing 3 April 2020 (est. $20,000);
- Waiving the parking cost at the Council-owned carpark in Murwillumbah for six months commencing 3 April 2020 (est. $13,000); and
- Pause/deferment on payments on Council loans for six months for all not-for-profit and sporting clubs commencing 3 April 2020.
Working From Home
The ATO have announced a “shortcut method” for claiming working from home deductions on 2019/20 tax return (for the period 1 March to 30 June 2020). This method has increased the hourly rate allowed from 52c to 80c. Note that this covers additional phone and internet costs so these will not be deductible in addition to the shortcut. Alternatively we can also claim under the usual methods.
A good summary is available from the ATO website here:
Today Scott Morrison announced a mandatory code to be rolled out in each State & Territory governing commercial tenancy relief.
To be eligible to negotiate under the code either party must:
- Be a business that is in a position of financial distress;
- Have a turnover of $50 million or less; and
- Be eligible to receive support under the JobKeeper program (meaning the business has experienced at least a 30 per cent drop in revenue due to Covid-19 restrictions).
Under the Code landlords must not terminate the lease or draw on a tenant’s security. Likewise tenants must honour the lease agreement.
With regard to rent reduction, landlords will be required to reduce rent in proportion to the trading reduction suffered by the tenant. This will be achieved by a combination of waivers and deferrals of rent. Of the rental concession allowed, at least 50% must be waived while the remaining concession can be deferred to be amortised over the life of the lease, or 12 months, whichever is longer.
Waivers of rent must account for 50 per cent at least of the reduction in the rental provided to the tenant during that period while deferrals must be covered over the balance of the lease term and for no less of a period than 12 months.
Many landlords and tenants have already negotiated terms and may need to review these in line with the new code.
Finally, stay safe and please get in touch if you have any questions.