NS Group Pandemic Series No. 1: Making the most of COVID-19 stimulus packages /

While we sit isolated in our makeshift home offices and ponder what the new world will look like, many of us who have lived through past events that significantly disrupted the world economy know that this isn’t the time for complacency, to wait and see. It’s now that we must take back some control to plan for future success.

If we take a look at where this started and how China’s economy has reacted, key indicators show surprisingly rapid stabilisation. Thirty days post Chinese New Year, coal consumption is up to 75% of 2019 levels which demonstrates that production is resuming and property transactions have reached more than 1,200 per day from a low of near zero.

Turning our focus back to the home front, we are coming to grips with the uncertainty of how Australian businesses will be able to respond in comparison as the market improves.

A key component of your forward planning should be to gain a true understanding of the various Federal and State Government stimulus packages that have been announced – what are they and who will benefit?

As we all work our way through this unprecedented coronavirus crisis to see light at the end of the tunnel, the team at NS Group is developing a collection of guides –  our ‘Pandemic Series’ – to support you in any way that we can to emerge stronger on the other side.

To help you navigate the next steps, we’ve captured a snapshot of all the national, state and territory economic stimulus packages currently available. We’ll endeavour to update this overview on our website as further information is released.

NATIONAL

$83.7bn Australian Government stimulus package

A total of $189bn has been committed at a federal level to support the nation’s economy. This includes $17.6bn for the first stimulus package announced on 12 March, $90bn from the Reserve Bank of Australia and $15bn from the Government to enable easier access to finance, and $66.1bn in the second stimulus package announced on 22 March.

This $189bn economic injection is equivalent to 9.7% of GDP – far exceeding Canada’s stimulus at 4.5% of GDP, Hong Kong’s 4.5% and South Korea’s 4%.

$17.6bn Stage 1

  • $700m to increase the instant asset write-off threshold from $30k to $150k and making more businesses eligible to use it
  • $3.2bn of time-limited investment incentives for businesses by accelerating depreciation deductions
  • $6.7bn cash flow boost for small and medium-sized businesses to receive up to $25,000 to cover the costs of employee wages and salaries
  • $1.3bn wage subsidy of 50% of apprentice/trainee’s wage during the 9 months from 1 January 2020 to 30 September 2020
  • $1bn waiver of fees and charges for businesses in heavily reliant industries, such as tourism, agriculture and education
  • $4.8bn of one-off payments of $750 to social security, veteran and other income support recipients and eligible concession card holders

$66.1bn Stage 2

  • $31.9bn cash flow boost for eligible small and medium-sized businesses, and not‑for-profits (including charities), that employ people to receive up to $100k, with a minimum payment of $20k
  • $20bn towards the Coronavirus SME Guarantee Scheme for small and medium-sized businesses to support $40bn in SME loans
  • $715m to support the Australian aviation industry’s airlines and airports
  • Providing temporary relief for financially distressed businesses by increasing the threshold at which creditors can issue a statutory demand on a company and the time to respond, including temporary relief for directors from any personal liability for trading while insolvent
  • $14.1bn for a new, time-limited coronavirus supplement to be paid at a rate of $550 per fortnight for the next 6 months for both existing and new recipients of the JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit
  • $4bn for a further $750 payment to social security and veteran income support recipients and eligible concession card holders
  • $1.2bn for individuals in financial stress to access up to $10k of their superannuation in 2019-20 and a further $10k in 2020-21
  • Temporarily reduced superannuation minimum drawdown rates
  • $876m to reduce social security deeming rates by a further 0.25%

WESTERN AUSTRALIA

$607m WA Government stimulus package

  • $402m to freeze household fees and charges, including electricity, water, motor vehicle charges, emergency services levy and public transport fares
  • $91m to double the Energy Assistance Payment [EAP], increased from $300 to $600 for eligible concession card holders
  • $114m in financial support to small and medium-sized businesses: one-off grant of $17.5k for payroll tax-paying businesses with a payroll between $1m and $4m; bring forward $1m payroll tax threshold by 6 months to 1 July 2020; and defer 2019-20 payroll tax until 21 July 2020

NEW SOUTH WALES

$2.3bn NSW Government stimulus package

  • $700m health boost in extra funding to NSW Health for doubling ICU capacity, additional testing and equipment, and establishing acute respiratory clinics
  • $450m to waive payroll tax for businesses with payrolls of up to $10m for 3 months [the rest of 2019-20]
  • $56m to bring forward $1m payroll tax threshold in 2020-21
  • $80m to waive a range of fees and charges for small businesses, including bars, cafes, restaurants and trades
  • $250m to employ additional cleaners of public infrastructure, such as transport assets, schools and other public buildings
  • $250m+ to bring forward maintenance on public assets, including social housing and crown land fencing
  • $500m to bring forward capital works and maintenance

VICTORIA

$1.7bn VIC Government stimulus package

  • $550m to provide full payroll tax refunds for the 2019-20 financial year to small and medium-sized businesses with payroll of less than $3m
  • $83m to defer payroll tax for the first 3 months of the 2020/21 financial year until 1 January 2021 for eligible businesses
  • Commercial tenants in government buildings can apply for rent relief
  • 2020 land tax payments will be deferred for eligible small businesses
  • $500m to establish a Business Support Fund for the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail
  • $500 million Working for Victoria Fund to help workers who have lost their jobs find new opportunities
  • Melbourne City Council has also committed to $10m in support, including $500k in grants to help businesses develop e-commerce and online services, $1m for training and support, halving 3 months’ rent for eligible tenants in council-owned buildings, and establishing a support service to provide advice for struggling businesses

QUEENSLAND

$27.25m QLD Government Immediate Industry Recovery Package [excl. loan facility and payroll tax]

  • $500m loan facility to help businesses retain employees and maintain their operations
  • Defer 2019-20 payroll tax until 21 July 2020 for eligible businesses
  • $2.75m for business counselling, financial resilience workshops and small business mentoring
  • $5.768m towards fees, charges and payment relief for impacted tourism operators and hospitality businesses
  • $1.1m Market Ready Program to provide export market intelligence, advice, forums and training for exporters
  • $3.66m commercial fishing assistance package
  • $7m to align Tourism Australia to promote Queensland to international markets
  • $4.8m for targeted tourism campaign to promote travel to Tropical North Queensland and the Gold Coast
  • $500k for #EatQLD campaign encouraging Queenslanders to buy local seafood and other agricultural products
  • $2m for Study Queensland campaign to diversify the international student market and support re-entry from Chinese students
  • $1m in support and counselling services to help impacted students returning to study

NORTHERN TERRITORY

$60m NT Government Jobs Rescue and Recovery Plan

  • $30m Home Improvement Scheme for homeowners to get a $6k grant for renovations if they spend $2k
  • $20m Business Improvement Grant to give businesses a $10k grant, followed by an additional $10k grant if they contribute $10k
  • $5m Immediate Work Grant of up to $100k for not-for-profit and community organisations to engage local businesses for repairs, renovations and upgrades to their property and facilities
  • $5m structural adjustment package to give businesses an initial $10k grant for upgrades and another $10k if they contribute $10k

AUSTRALIAN CAPITAL TERRITORY

$137m ACT Government stimulus package

  • $41.7m household and business rates package rebates
  • Waive payroll tax for 6 months from 1 April 2020 for businesses in the most-affected sectors, such as tourism, hospitality and entertainment
  • Defer 2020-21 payroll tax until 1 July 2022 for medium-sized businesses with payrolls up to $10m
  • $2m in subsidies for apprenticeships, traineeships and other VET students
  • $20m to boost minor capital works projects that don’t need procurement processes
  • $3m to fast-track urban forest and public realm maintenance

SOUTH AUSTRALIA

$350m SA Government stimulus package

  • $15m for regional health projects, including $5m for regional aged care facilities
  • $22m for nature-based tourism infrastructure and to fast-track the recovery of regional economies
  • In addition to the stimulus package, the SA Government has doubled the Planning and Development Fund for 2020 to $50m which will match local government contributions on a 50:50 basis

TASMANIA

$420m TAS Government stimulus package

  • $20m in interest-free loans for small businesses in the hospitality, tourism, seafood production and exports sectors
  • Waive payroll tax for the last 4 months of this financial year for hospitality, tourism, seafood production sectors
  • $50m to fast-track the government maintenance program
  • Targeted Small Business Grants Program for apprenticeships and traineeships
  • Youth Employment Scheme for payroll tax rebate for one year to businesses that employ a young person aged 24 and under hired between April and December 2020
  • $80k for human resources and industrial relations assistance
  • $50m in interest-free loans for local government
  • $100k for Tourism and Hospitality Training Fund
  • $1m towards the Holiday at Home campaign

Stay tuned for the next edition of NS Group’s ‘Pandemic Series’. If you’d like more information and assistance, please don’t hesitate to reach out.

Disclaimer: The information provided has been sourced and collated from various online resources and is correct as at 21 March 2020. This information is intended to serve as general information purposes only. NS Group does not guarantee, and accepts no legal liability whatsoever arising from, or connected to, the use of this information or from any linked site. We recommend that you seek appropriate independent professional advice before making any decisions based on the information provided.

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