Australian Small Business Ombudsman Kate Carnell welcomed the federal government’s latest support measures designed to help small businesses through the COVID-19 crisis. “This package gives small and family businesses some breathing space until circumstances return to normal." The package includes assistance for small to medium sized businesses to help them retain staff members.
The economic support package includes:
Support for households including casuals, sole-traders, retirees and those on income support
Assistance for businesses to keep people in a job
Regulatory protection and financial support for businesses to stay in business
 |
|
"Some breathing space": Kate Carnell,
|
“The federal government has listened to the feedback we have provided and responded to the needs of small and family businesses accordingly,” says Carnell.“In particular, we support the measures extended to sole traders, which make up more than 60% of Australia’s business community.
“Importantly, sole traders who experience a significant loss of income, will be eligible for the Coronavirus supplement and jobseeker payment which will assist them to continue working for the next 6 months.
“The government is providing small and medium sized businesses that employ people with up to $100,000 (minimum payment of $20,000) to assist with outgoings so they can keep their doors open for as long as possible.
“People experiencing financial hardship can now access up to $10,000 of their superannuation this financial year and an extra $10,000 the year after without paying tax.”
The creation of the Coronavirus SME Guarantee Scheme will help businesses gain access to the working capital they need, Carnell says.
“We support the government’s pledge to guarantee 50% of new loans issued by approved lenders.
“Ultimately, this package gives small and family businesses some breathing space until circumstances return to normal, which will play a critical role in their survival and the ability for our economy to bounce back.”
In announcing the second stage of the government's economic plan to cushion the economic impact of the coronavirus, Prime Minister Scott Morrison said: “We know Australia’s more than 3 million small and medium businesses are the engine room of our economy. When they hurt, we all hurt.
“The next few months are going to be a difficult journey but we all have a role to play to adapt to the changes we’re facing, to cushion the impact of what is happening and to pull together so we can bounce back when we get to the other side.”
You can read the full government announcement here.
The package includes assistance to businesses to keep people in a job:
Boosting Cash Flow for Employers
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. These payments will help businesses’ and not-for-profits’ cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.
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.
The payments are tax free, there will be no new forms and payments will flow automatically through the ATO.
This measure will benefit around 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. NFPs entities, including charities, with aggregated annual turnover under $50 million and that employ workers will now also be eligible. This will support employment at a time where NFPs are facing increasing demand for services.
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.
