COVID 19 updates 24 March

Newsletter - COVID-19 updates

________________________________________

Cents & Sensibility | Tax News | Views | Clues

24 March

knp COVID-19 Relief packages/stimulus (Federal Government, State Government & ATO)

COVID-19 has invoked an unprecedented response from the Federal Government, Victorian State Government & the Australian Taxation Office (ATO). The focus of these packages is on supporting businesses & individuals who will face a decline in income over the coming months. knp has identified five different strategies to assist business and individuals in these difficult times;

1.Federal Government - Economic Response to the Coronavirus

2.Victorian State Government – Economic Survival Package

3.Australian Taxation Office – Administrative Concessions

4.Strategies and impacts on Superannuation

5.Cashflow strategies

If you would like to discuss how to best take advantage of these measures, please contact your accountant at knp. A list of direct lines & email addresses can be found HERE.

Yesterday (23/03/2020), we made the decision that it is in the best interests of our staff and their families for all staff to commence working from home.

This is something we have been preparing for over the previous few weeks and were ready when the decision was made. We are well placed being 100% cloud-based & all staff have reliable computers with internet access. As a result of our staff working remotely, you can expect some differences in how we communicate & how documents are supplied to you. We are well placed being 100% cloud-based.

For more information please read the announcement HERE.

Federal Government - Economic Response to the Coronavirus

In response to the financial stress and economic challenges created by the Coronavirus pandemic, the Government has issued economic support packages to support households and business through this economic downturn. Its objectives include providing support to businesses in managing short-term cash flow challenges, income support to individuals, severely affected communities and regions and to ensure the continued flow of credit in the Australian economy.

This article summarises the key points of the Treasury’s announcement which may provide assistance to you.

As of 25 March 2020, all the measures mentioned below are now law.

As the current climate and information continues to change, we will continue to update this article regularly to keep it abreast of any new changes.

Summary of the Economic Response

The following are three focus points of Treasury’s economic response:

Support for individuals and households
Support for businesses
Supporting the flow of credit

1. Support for individuals and households

a. Income support for individuals

1. For the next 6 months, the Government has announced that it is temporarily expanding the eligibility to access income support payments and

establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight.

2. This will be paid to both existing and new recipients of:

a. Jobseeker Payment’s (previously known as the Newstart Allowance)

b. Parenting Payment

c. Farm Household Allowance

d. Special Benefit

3. All who are eligible for these payments will receive the full $550 per fortnight.

4. Eligibility to access the income support payments mentioned above has also been expanded to include the following:

a. Jobseeker Payments will also be available to permanent employees who are stood down or lose their employment, sole traders, the self-employed,

casual workers and contract workers who meeting the income tests as a result of the economic downturn due to the coronavirus.

b. Asset testing for the Jobseeker payments and Parenting payments will be waived for the period of the Coronavirus supplement. Income testing will still

apply to the individual’s other payments.

b. Payments to support households

1. If you are one of the following, you will receive two separate $750 payments from the government, with the first on 31 March 2020 and the second on 13

July 2020:

a. Social security recipients

b. Veteran income support recipients

c. Eligible concession card holders

2. These payments are aimed to help build confidence and support domestic demand in the economy.

3. Please note, the second payment will not be made to those eligible for the Coronavirus supplement payment mentioned above.

2. Support for business

a. Boosting Cash Flow for Employers

1. Summary - The Government is providing up to $100,000 to eligible small and medium-sized businesses, and not-for-profits (NFPs) that employ people,

with a minimum payment of $20,000.

2. Eligibility - Small and medium-sized business entities and NFPS, including charities with aggregated annual turnover under $50 million (prior year

turnover). The payments will only be available to active eligible employers established prior to 12 March 2020.

3. Amount of Payments - Under this enhanced scheme, employers will receive a payment equal to 100% of their salary and wages withheld (PAYG

Withholding), with the minimum payment being $10,000 (increased from $2,000) and the maximum payment being $50,000. These payments will

automatically be credited into the eligible entity’s account from 28 April 2020.

4. Additional payments - An additional payment is also being introduced in the July – October 2020 period. Eligible entities will receive an additional

payment equal to the total of all the Boosting Cash Flow for Employers payments they have received. This therefore means that eligible entities will receive

at least $20,000 up to a total of $100,000 under both payments.

b. Temporary relief for financially distressed businesses

1. The Government is introducing a safety net for businesses to ensure that when the crisis has passed, they can resume normal business operations

2. The safety net includes the following measures:

a. Temporarily increasing the threshold at which creditors can issues a statutory demand on a company and to initiate bankrupt proceedings against an

individual.

b. Temporarily increasing of the time companies and individuals must respond to statutory demands they receive.

c. temporary relief for directors from any personal liability for trading while insolvent and providing temporary flexibility in the Corporations Act 2001 to

provide targeted relief from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health crisis.

d. The ATO will tailor solutions for owners or directors of business that are currently struggling due to the Coronavirus, including temporary reduction of

payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.

c. Increasing the instant asset write-off

1. The Government is increasing the instant asset write-off threshold commencing 12 March 2020 from $30,000 to $150,000 and expanding access to

include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. This is only for newly purchased

assets or assets that were installed ready for use between 12 March 2020 to 30 June 2020, not previously purchased assets.

d. Accelerated Depreciation Deduction

1. The Government is introducing a time-limited 15-month investment incentive (from 12 March 2020 to 30 June 2021) to support business investment and

economic growth over the short term, by accelerating depreciation deductions.

2. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing

depreciation rules applying to the balance of the asset’s cost.

3. This rule does not apply to second-hand assets or building and capital work assets.

e. Supporting apprentices and trainees

1. The Government is supporting small business to retain their apprentices and trainees.

2. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for 9 months from 1 January 2020 to 30 September

2020.

3. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.

4. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

5. Support will also be provided to the National Apprentice Employment Network, the peak national body representing Group Training Organisations, to co-

ordinate the re-employment of displaced apprentices and trainees throughout their network of host employers across Australia.

3. Supporting the flow of credit

a. Support for immediate cash flow needs for small and medium enterprises (SMEs)

1. SMEs with a turnover of up to $50 million will be eligible to receive the following loans.

2. Under the Coronavirus SME Guarantee Scheme, the Government will provide a guarantee of 50% to SME lenders to support new short-term unsecured

loans to SMEs.

3. The loans will have the following terms

a. Maximum total size of loans of $250,000 per borrower

b. Loans will be up to 3 years, with an initial repayment holiday period of 6 months.

c. The loans will be in the form of unsecured finance, so the borrowers will not have to provide an asset as security for the loan.

b. Reserve Bank of Australia (RBA) announcements to support cash flow and reducing the cost of credit

1. The Reserve Bank of Australia (RBA) announced a package on 19 March 2020 that will put downward pressure on borrowing costs for households and

businesses.

2. The RBA announced a term funding facility for the banking system. Banks will have access to at least $90 billion in funding at a fixed interest rate of 0.25

per cent.

3. This is aimed to encourage continued business lending and to expand lending further.

For further information or assistance on any of the above, please contact us at knp. More detail is also available by following these links:

Economic response to the Coronavirus - https://treasury.gov.au/coronavirus

Supporting Individuals and Households - https://treasury.gov.au/coronavirus/households

Support for Businesses - https://treasury.gov.au/coronavirus/businesses

Supporting the Flow of Credit - https://treasury.gov.au/coronavirus/business-investment

Fact sheets in relation to the Australian Government’s economic response can be founds here - https://treasury.gov.au/coronavirus/resources

Federal Government - Economic Response to the Coronavirus

This article summarises the key points of the Treasury’s announcement which may provide assistance to you.

As of 25 March 2020, all the measures mentioned below are now law.

As the current climate and information continues to change, we will continue to update this article regularly to keep it abreast of any new changes.

Summary of the Economic Response

The following are three focus points of Treasury’s economic response:

Support for individuals and households
Support for businesses
Supporting the flow of credit

1. Support for individuals and households

a. Income support for individuals

1. For the next 6 months, the Government has announced that it is temporarily expanding the

eligibility to access income support payments and establishing a new, time-limited Coronavirus

supplement to be paid at a rate of $550 per fortnight.

2. This will be paid to both existing and new recipients of:

a.Jobseeker Payment’s (previously known as the Newstart Allowance)

b.Parenting Payment

c.Farm Household Allowance

d.Special Benefit

3. All who are eligible for these payments will receive the full $550 per fortnight.

4. Eligibility to access the income support payments mentioned above has also been expanded to

include the following:

a. Jobseeker Payments will also be available to permanent employees who are stood down or

lose their employment, sole traders, the self-employed, casual workers and contract workers who

meeting the income tests as a result of the economic downturn due to the coronavirus.

b. Asset testing for the Jobseeker payments and Parenting payments will be waived for the period

of the Coronavirus supplement. Income testing will still apply to the individual’s other payments.

b. Payments to support households

1. If you are one of the following, you will receive two separate $750 payments from the

government, with the first on 31 March 2020 and the second on 13 July 2020:

a. Social security recipients

b. Veteran income support recipients

c. Eligible concession card holders

2. These payments are aimed to help build confidence and support domestic demand in the

economy.

3. Please note, the second payment will not be made to those eligible for the Coronavirus

supplement payment mentioned above.

2. Support for business

a. Boosting Cash Flow for Employers

1. Summary - The Government is providing up to $100,000 to eligible small and medium-sized

businesses, and not-for-profits (NFPs) that employ people, with a minimum payment of $20,000.

2. Eligibility - Small and medium-sized business entities and NFPS, including charities with

aggregated annual turnover under $50 million (prior year turnover). The payments will only be

available to active eligible employers established prior to 12 March 2020.

3. Amount of Payments - Under this enhanced scheme, employers will receive a payment equal

to 100% of their salary and wages withheld (PAYG Withholding), with the minimum payment

being $10,000 (increased from $2,000) and the maximum payment being $50,000. These

payments will automatically be credited into the eligible entity’s account from 28 April 2020.

4. Additional payments - An additional payment is also being introduced in the July – October

2020 period. Eligible entities will receive an additional payment equal to the total of all the

Boosting Cash Flow for Employers payments they have received. This therefore means that

eligible entities will receive at least $20,000 up to a total of $100,000 under both payments.

b. Temporary relief for financially distressed businesses

1. The Government is introducing a safety net for businesses to ensure that when the crisis has

passed, they can resume normal business operations

2. The safety net includes the following measures:

a.Temporarily increasing the threshold at which creditors can issues a statutory demand on a

company and to initiate bankrupt proceedings against an individual.

b. Temporarily increasing of the time companies and individuals must respond to statutory

demands they receive.

c. temporary relief for directors from any personal liability for trading while insolvent and

providing temporary flexibility in the Corporations Act 2001 to provide targeted relief from

provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus

health crisis.

d. The ATO will tailor solutions for owners or directors of business that are currently struggling

due to the Coronavirus, including temporary reduction of payments or deferrals, or withholding

enforcement actions including Director Penalty Notices and wind-ups.

c. Increasing the instant asset write-off

1. The Government is increasing the instant asset write-off threshold commencing 12 March 2020

from $30,000 to $150,000 and expanding access to include businesses with aggregated annual

turnover of less than $500 million (up from $50 million) until 30 June 2020. This is only for newly

purchased assets or assets that were installed ready for use between 12 March 2020 to 30 June

2020, not previously purchased assets.

d. Accelerated Depreciation Deduction

1. The Government is introducing a time-limited 15-month investment incentive (from 12 March

2020 to 30 June 2021) to support business investment and economic growth over the short term,

by accelerating depreciation deductions.

2. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the

cost of an eligible asset on installation, with existing depreciation rules applying to the balance of

the asset’s cost.

3. This rule does not apply to second-hand assets or building and capital work assets.

e. Supporting apprentices and trainees

1. The Government is supporting small business to retain their apprentices and trainees.

2. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s

wage for 9 months from 1 January 2020 to 30 September 2020.

3. Where a small business is not able to retain an apprentice, the subsidy will be available to a

new employer that employs that apprentice.

4. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee

($7,000 per quarter).

5. Support will also be provided to the National Apprentice Employment Network, the peak

national body representing Group Training Organisations, to co-ordinate the re-employment of

displaced apprentices and trainees throughout their network of host employers across Australia.

3. Supporting the flow of credit

a. Support for immediate cash flow needs for small and medium enterprises (SMEs)

1. SMEs with a turnover of up to $50 million will be eligible to receive the following loans.

2. Under the Coronavirus SME Guarantee Scheme, the Government will provide a guarantee of

50% to SME lenders to support new short-term unsecured loans to SMEs.

3. The loans will have the following terms

a. Maximum total size of loans of $250,000 per borrower

b. Loans will be up to 3 years, with an initial repayment holiday period of 6 months.

c. The loans will be in the form of unsecured finance, so the borrowers will not have to provide

an asset as security for the loan.

b. Reserve Bank of Australia (RBA) announcements to support cash flow and reducing the cost of credit

1. The Reserve Bank of Australia (RBA) announced a package on 19 March 2020 that will put

downward pressure on borrowing costs for households and businesses.

2. The RBA announced a term funding facility for the banking system. Banks will have access to

at least $90 billion in funding at a fixed interest rate of 0.25 per cent.

3. This is aimed to encourage continued business lending and to expand lending further.

For further information or assistance on any of the above, please contact us at knp. More detail is also available by following these links:

Economic response to the Coronavirus - https://treasury.gov.au/coronavirus

Supporting Individuals and Households - https://treasury.gov.au/coronavirus/households

Support for Businesses - https://treasury.gov.au/coronavirus/businesses

Supporting the Flow of Credit - https://treasury.gov.au/coronavirus/business-investment

Fact sheets in relation to the Australian Government’s economic response can be founds here - https://treasury.gov.au/coronavirus/resources

Federal Government - Economic Response to the Coronavirus

This article summarises the key points of the Treasury’s announcement which may provide assistance to you.

As of 25 March 2020, all the measures mentioned below are now law.

As the current climate and information continues to change, we will continue to update this article regularly to keep it abreast of any new changes.

Summary of the Economic Response

The following are three focus points of Treasury’s economic response:

Support for individuals and households
Support for businesses
Supporting the flow of credit

1. Support for individuals and households

a. Income support for individuals

1. For the next 6 months, the Government has announced that it is temporarily expanding the eligibility to access income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight.

2. This will be paid to both existing and new recipients of:

a. Jobseeker Payment’s (previously known as the Newstart

Allowance)

b. Parenting Payment

c. Farm Household Allowance

d. Special Benefit

3. All who are eligible for these payments will receive the full $550 per

fortnight.

4. Eligibility to access the income support payments mentioned above

has also been expanded to include the following:

a. Jobseeker Payments will also be available to permanent employees

who are stood down or lose their employment, sole traders, the self-

employed, casual workers and contract workers who meeting the

income tests as a result of the economic downturn due to the

coronavirus.

b. Asset testing for the Jobseeker payments and Parenting payments

will be waived for the period of the Coronavirus supplement. Income

testing will still apply to the individual’s other payments.

b. Payments to support households

1. If you are one of the following, you will receive two separate $750 payments from the government, with the first on 31 March 2020 and the second on 13 July 2020:

a. Social security recipients

b. Veteran income support recipients

c. Eligible concession card holders

2. These payments are aimed to help build confidence and support domestic demand in the economy.

3. Please note, the second payment will not be made to those eligible for

the Coronavirus supplement payment mentioned above.

2. Support for business

a. Boosting Cash Flow for Employers

1. Summary - The Government is providing up to $100,000 to eligible small and medium-sized businesses, and not-for-profits (NFPs) that employ people, with a minimum payment of $20,000.

2. Eligibility - Small and medium-sized business entities and NFPS, including charities with aggregated annual turnover under $50 million (prior year turnover). The payments will only be available to active eligible employers established prior to 12 March 2020.

3. Amount of Payments - Under this enhanced scheme, employers will

receive a payment equal to 100% of their salary and wages withheld

(PAYG Withholding), with the minimum payment being $10,000 (increased from $2,000) and the maximum payment being $50,000. These payments will automatically be credited into the eligible entity’s account from 28 April 2020.

4. Additional payments - An additional payment is also being introduced in the July – October 2020 period. Eligible entities will receive an additional payment equal to the total of all the Boosting Cash Flow for Employers payments they have received. This therefore means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments.

b. Temporary relief for financially distressed businesses

1. The Government is introducing a safety net for businesses to ensure

that when the crisis has passed, they can resume normal business operations

2. The safety net includes the following measures:

a.Temporarily increasing the threshold at which creditors can issues a

statutory demand on a company and to initiate bankrupt proceedings against an individual.

b. Temporarily increasing of the time companies and individuals must

respond to statutory demands they receive.

c. temporary relief for directors from any personal liability for trading while insolvent and providing temporary flexibility in the Corporations Act 2001 to provide targeted relief from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health crisis.

d. The ATO will tailor solutions for owners or directors of business that

are currently struggling due to the Coronavirus, including temporary reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.

c. Increasing the instant asset write-off

1. The Government is increasing the instant asset write-off threshold

commencing 12 March 2020 from $30,000 to $150,000 and expanding

access to include businesses with aggregated annual turnover of less

than $500 million (up from $50 million) until 30 June 2020. This is only

for newly purchased assets or assets that were installed ready for use

between 12 March 2020 to 30 June 2020, not previously purchased assets.

d. Accelerated Depreciation Deduction

1. The Government is introducing a time-limited 15-month investment

incentive (from 12 March 2020 to 30 June 2021) to support business

investment and economic growth over the short term, by accelerating

depreciation deductions.

2. Businesses with a turnover of less than $500 million will be able to

deduct 50 per cent of the cost of an eligible asset on installation, with

existing depreciation rules applying to the balance of the asset’s cost.

3. This rule does not apply to second-hand assets or building and capital work assets.

e. Supporting apprentices and trainees

1. The Government is supporting small business to retain their apprentices and trainees.

2. Eligible employers can apply for a wage subsidy of 50 per cent of the

apprentice’s or trainee’s wage for 9 months from 1 January 2020 to 30

September 2020.

3. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.

4. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

5. Support will also be provided to the National Apprentice Employment

Network, the peak national body representing Group Training Organisations, to co-ordinate the re-employment of displaced apprentices and trainees throughout their network of host employers across Australia.

3. Supporting the flow of credit

a. Support for immediate cash flow needs for small and medium enterprises (SMEs)

1. SMEs with a turnover of up to $50 million will be eligible to receive the

following loans.

2. Under the Coronavirus SME Guarantee Scheme, the Government will

provide a guarantee of 50% to SME lenders to support new short-term

unsecured loans to SMEs.

3. The loans will have the following terms

a. Maximum total size of loans of $250,000 per borrower

b. Loans will be up to 3 years, with an initial repayment holiday period of

6 months.

c. The loans will be in the form of unsecured finance, so the borrowers

will not have to provide an asset as security for the loan.

b. Reserve Bank of Australia (RBA) announcements to support cash flow and reducing the cost of credit

1. The Reserve Bank of Australia (RBA) announced a package on 19

March 2020 that will put downward pressure on borrowing costs for households and businesses.

2. The RBA announced a term funding facility for the banking system.

Banks will have access to at least $90 billion in funding at a fixed interest rate of 0.25 per cent.

3. This is aimed to encourage continued business lending and to expand

lending further.

For further information or assistance on any of the above, please contact us at knp. More detail is also available by following these links:

Economic response to the Coronavirus - https://treasury.gov.au/coronavirus

Supporting Individuals and Households - https://treasury.gov.au/coronavirus/households

Support for Businesses - https://treasury.gov.au/coronavirus/businesses

Supporting the Flow of Credit - https://treasury.gov.au/coronavirus/business-investment

Fact sheets in relation to the Australian Government’s economic response can be founds here - https://treasury.gov.au/coronavirus/resources

Federal Government - Economic Response to the Coronavirus

This article summarises the key points of the Treasury’s announcement which may provide assistance to you.

As of 25 March 2020, all the measures mentioned below are now law.

As the current climate and information continues to change, we will continue to update this article regularly to keep it abreast of any new changes.

Summary of the Economic Response

The following are three focus points of Treasury’s economic response:

Support for individuals and households
Support for businesses
Supporting the flow of credit

1. Support for individuals and households

a. Income support for individuals

1. For the next 6 months, the Government

has announced that it is temporarily

expanding the eligibility to access income

support payments and establishing a new,

time-limited Coronavirus supplement to be

paid at a rate of $550 per fortnight.

2. This will be paid to both existing and new

recipients of:

a. Jobseeker Payment’s (previously

known as the Newstart

Allowance)

b. Parenting Payment

c. Farm Household Allowance

d. Special Benefit

3. All who are eligible for these payments

will receive the full $550 per fortnight.

4. Eligibility to access the income support

payments mentioned above has also been

expanded to include the following:

a. Jobseeker Payments will also be

available to permanent employees who

are stood down or lose their employment,

sole traders, the self-employed, casual

workers and contract workers who

meeting the income tests as a result of the

economic downturn due to the

coronavirus.

b. Asset testing for the Jobseeker

payments and Parenting payments will be

waived for the period of the Coronavirus

supplement. Income testing will still

apply to the individual’s other payments.

b. Payments to support households

1. If you are one of the following, you will

receive two separate $750 payments from

the government, with the first on 31 March

2020 and the second on 13 July 2020:

a. Social security recipients

b. Veteran income support recipients

c. Eligible concession card holders

2. These payments are aimed to help build

confidence and support domestic demand in

the economy.

3. Please note, the second payment will not

be made to those eligible for the Coronavirus

supplement payment mentioned above.

2. Support for business

a. Boosting Cash Flow for Employers

1. Summary - The Government is providing

up to $100,000 to eligible small and medium-

sized businesses, and not-for-profits (NFPs)

that employ people, with a minimum

payment of $20,000.

2. Eligibility - Small and medium-sized

business entities and NFPS, including

charities with aggregated annual turnover

under $50 million (prior year turnover). The

payments will only be available to active

eligible employers established prior to 12

March 2020.

3. Amount of Payments - Under this

enhanced scheme, employers will receive a

payment equal to 100% of their salary and

wages withheld (PAYG Withholding), with

the minimum payment being $10,000

(increased from $2,000) and the maximum

payment being $50,000. These payments will automatically be credited into the eligible entity’s account from 28 April 2020.

4. Additional payments - An additional

payment is also being introduced in the July

– October 2020 period. Eligible entities will

receive an additional payment equal to the

total of all the Boosting Cash Flow

for Employers payments they have received.

This therefore means that eligible entities will

receive at least $20,000 up to a total of

$100,000 under both payments.

b. Temporary relief for financially distressed businesses

1. The Government is introducing a safety

net for businesses to ensure that when the

crisis has passed, they can resume normal

business operations

2. The safety net includes the following

measures:

a.Temporarily increasing the threshold at

which creditors can issues a statutory

demand on a company and to initiate

bankrupt proceedings against an

individual.

b. Temporarily increasing of the time

companies and individuals must respond

to statutory demands they receive.

c. temporary relief for directors from any

personal liability for trading while insolvent

and providing temporary flexibility in the

Corporations Act 2001 to provide targeted

relief from provisions of the Act to deal

with unforeseen events that arise as a

result of the Coronavirus health crisis.

d. The ATO will tailor solutions for owners

or directors of business that are currently

struggling due to the Coronavirus,

including temporary reduction of payments

or deferrals, or withholding enforcement

actions including Director Penalty Notices

and wind-ups.

c. Increasing the instant asset write-off

1. The Government is increasing the instant asset write-off threshold commencing 12 March 2020 from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. This is only for newly purchased assets or assets that were installed ready for use between 12 March 2020 to 30 June 2020, not previously purchased assets.

d. Accelerated Depreciation Deduction

1. The Government is introducing a time- limited 15-month investment incentive (from 12 March 2020 to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions.

2. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.

3. This rule does not apply to second-hand assets or building and capital work assets.

e. Supporting apprentices and trainees

1. The Government is supporting small business to retain their apprentices and trainees.

2. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for 9 months from 1 January 2020 to 30 September 2020.

3. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.

4. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

5. Support will also be provided to the National Apprentice Employment Network, the peak national body representing Group Training Organisations, to co-ordinate the re- employment of displaced apprentices and trainees throughout their network of host employers across Australia.

3. Supporting the flow of credit

a. Support for immediate cash flow needs for small and medium enterprises (SMEs)

1. SMEs with a turnover of up to $50 million will be eligible to receive the following loans.

2. Under the Coronavirus SME Guarantee Scheme, the Government will provide a guarantee of 50% to SME lenders to support new short-term unsecured loans to SMEs.

3. The loans will have the following terms

a. Maximum total size of loans of $250,000 per borrower
b. Loans will be up to 3 years, with an initial repayment holiday period of 6 months.
c. The loans will be in the form of unsecured finance, so the borrowers will not have to provide an asset as security for the loan.

b. Reserve Bank of Australia (RBA) announcements to support cash flow and reducing the cost of credit

1. The Reserve Bank of Australia (RBA) announced a package on 19 March 2020 that will put downward pressure on borrowing costs for households and businesses.

2. The RBA announced a term funding facility for the banking system. Banks will have access to at least $90 billion in funding at a fixed interest rate of 0.25 per cent.

3. This is aimed to encourage continued business lending and to expand lending further.

For further information or assistance on any of the above, please contact us at knp. More detail is also available by following these links:

Economic response to the Coronavirus - https://treasury.gov.au/coronavirus

Supporting Individuals and Households - https://treasury.gov.au/coronavirus/households

Support for Businesses - https://treasury.gov.au/coronavirus/businesses

Supporting the Flow of Credit - https://treasury.gov.au/coronavirus/business-investment

Fact sheets in relation to the Australian Government’s economic response can be founds here - https://treasury.gov.au/coronavirus/resources

Victorian State Government - Economic Survival Package

1. Payroll Tax Refund

The Government will provide full payroll tax refunds for the 2019-20 financial year to small and medium-sized business entities with payroll of less than $3 millionPayments will commence from the 30th March 2020. This assistance is a refund, not a loan.The same businesses will also be able to defer any payroll tax for the first three months of the 2020/21 financial year until 1 January 2021.

2. Rent Relief

Commercial tenants in government buildings can apply for rent relief – a move private landlords are also being encouraged to undertake.

3. Land Tax Deferral

2020 Land Tax Payments will be deferred for eligible small businesses. Those eligible are Landowners that have at least one taxable non-residential property and total taxable landholdings below $1 million.Non-residential property includes:

a. Commercial property,

b. Industrial property, and

c. Vacant land (excluding residential vacant land).

4. Other Measures:

a. The Government will pay all outstanding supplier invoices within five business days, urging the private sector to do the same.

b. The Government will waive liquor licensing fees for 2020 for affected venues and small businesses.

c. The government will also provide $500 million to establish a Business Support Fund. The fund will support the hardest hit sectors, including hospitality,

tourism, accommodation, arts and entertainment, and retail.

d. The Government will establish a $500 million Working for Victoria Fund in consultation with the Victorian Council of Social Services and Victoria Trade

Hall Council.

e. The Government will also facilitate job matching to help Victorians find short-term or casual roles.

For further information or assistance on any of the above, please contact us at knp

Please also see below links to information regarding Stimulus Packages for the other States and Territories:

Australian Capital Territory https://apps.treasury.act.gov.au/budget/covid-19-economic-survival-package/local-business-and-industry

Queensland https://www.business.qld.gov.au/starting-business/advice-support/support/novel-coronavirus

New South Wales https://www.smallbusiness.nsw.gov.au/get-help/covid-19-coronavirus-information-small-business-owners

Northern Territory https://business.nt.gov.au/support-for-business/recovery

South Australia https://www.premier.sa.gov.au/news/media-releases/news/local-communities-set-to-benefit-from-$350-million-stimulus

Tasmania http://www.premier.tas.gov.au/releases/investing_to_sustain_a_strong_economy_and_local_jobs

Western Australia https://www.wa.gov.au/organisation/department-of-the-premier-and-cabinet/coronavirus-covid-19-business-and-industry-advice

Victorian State Government - Economic Survival Package

1. Payroll Tax Refund

2. Rent Relief

Commercial tenants in government buildings can apply for rent relief – a move private landlords are also being encouraged to undertake.

3. Land Tax Deferral

a. Commercial property,

b. Industrial property, and

c. Vacant land (excluding residential vacant land).

4. Other Measures:

a. The Government will pay all outstanding supplier invoices within five business days, urging

the private sector to do the same.

b. The Government will waive liquor licensing fees for 2020 for affected venues and small

businesses.

c. The government will also provide $500 million to establish a Business Support Fund. The fund

will support the hardest hit sectors, including hospitality, tourism, accommodation, arts and

entertainment, and retail.

d. The Government will establish a $500 million Working for Victoria Fund in consultation with

the Victorian Council of Social Services and Victoria Trade Hall Council.

e. The Government will also facilitate job matching to help Victorians find short-term or casual

roles.

For further information or assistance on any of the above, please contact us at knp

Please also see below links to information regarding Stimulus Packages for the other States and Territories:

Australian Capital Territory https://apps.treasury.act.gov.au/budget/covid-19-economic-survival-package/local-business-and-industry

Queensland https://www.business.qld.gov.au/starting-business/advice-support/support/novel-coronavirus

New South Wales https://www.smallbusiness.nsw.gov.au/get-help/covid-19-coronavirus-information-small-business-owners

Northern Territory https://business.nt.gov.au/support-for-business/recovery

South Australia https://www.premier.sa.gov.au/news/media-releases/news/local-communities-set-to-benefit-from-$350-million-stimulus

Tasmania http://www.premier.tas.gov.au/releases/investing_to_sustain_a_strong_economy_and_local_jobs

Western Australia https://www.wa.gov.au/organisation/department-of-the-premier-and-cabinet/coronavirus-covid-19-business-and-industry-advice

Victorian State Government - Economic Survival Package

1. Payroll Tax Refund

2. Rent Relief

Commercial tenants in government buildings can apply for rent relief – a move private landlords are also being encouraged to undertake.

3. Land Tax Deferral

a. Commercial property,

b. Industrial property, and

c. Vacant land (excluding residential vacant land).

4. Other Measures:

a.The Government will pay all outstanding supplier invoices within five

business days, urging the private sector to do the same.

b.The Government will waive liquor licensing fees for 2020 for affected

venues and small businesses.

c.The government will also provide $500 million to establish a Business

Support Fund. The fund will support the hardest hit sectors, including

hospitality, tourism, accommodation, arts and entertainment, and retail.

d.The Government will establish a $500 million Working for Victoria

Fund in consultation with the Victorian Council of Social Services and

Victoria Trade Hall Council.

e.The Government will also facilitate job matching to help Victorians find

short-term or casual roles.

For further information or assistance on any of the above, please contact us at knp

Please also see below links to information regarding Stimulus Packages for the other States and Territories:

Australian Capital Territory https://apps.treasury.act.gov.au/budget/covid-19-economic-survival-package/local-business-and-industry

Queensland https://www.business.qld.gov.au/starting-business/advice-support/support/novel-coronavirus

New South Wales https://www.smallbusiness.nsw.gov.au/get-help/covid-19-coronavirus-information-small-business-owners

Northern Territory https://business.nt.gov.au/support-for-business/recovery

South Australia https://www.premier.sa.gov.au/news/media-releases/news/local-communities-set-to-benefit-from-$350-million-stimulus

Tasmania http://www.premier.tas.gov.au/releases/investing_to_sustain_a_strong_economy_and_local_jobs

Western Australia https://www.wa.gov.au/organisation/department-of-the-premier-and-cabinet/coronavirus-covid-19-business-and-industry-advice

Victorian State Government - Economic Survival Package

1. Payroll Tax Refund

2. Rent Relief

Commercial tenants in government buildings can apply for rent relief – a move private landlords are also being encouraged to undertake.

3. Land Tax Deferral

a. Commercial property,

b. Industrial property, and

c. Vacant land (excluding residential vacant

land).

4. Other Measures:

a.The Government will pay all outstanding supplier invoices within five business days, urging the private sector to do the same.

b.The Government will waive liquor licensing fees for 2020 for affected venues and small businesses.

c.The government will also provide $500 million to establish a Business Support Fund. The fund will support the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail.

d.The Government will establish a $500 million Working for Victoria Fund in consultation with the Victorian Council of Social Services and Victoria Trade Hall Council.

e.The Government will also facilitate job matching to help Victorians find short-term or casual roles.

For further information or assistance on any of the above, please contact us at knp

Please also see below links to information regarding Stimulus Packages for the other States and Territories:

Australian Capital Territory https://apps.treasury.act.gov.au/budget/covid-19-economic-survival-package/local-business-and-industry

Queensland https://www.business.qld.gov.au/starting-business/advice-support/support/novel-coronavirus

New South Wales https://www.smallbusiness.nsw.gov.au/get-help/covid-19-coronavirus-information-small-business-owners

Northern Territory https://business.nt.gov.au/support-for-business/recovery

South Australia https://www.premier.sa.gov.au/news/media-releases/news/local-communities-set-to-benefit-from-$350-million-stimulus

Tasmania http://www.premier.tas.gov.au/releases/investing_to_sustain_a_strong_economy_and_local_jobs

Western Australia https://www.wa.gov.au/organisation/department-of-the-premier-and-cabinet/coronavirus-covid-19-business-and-industry-advice

The Australian Taxation Office - Administrative Concessions

The ATO announced a series of administrative concessions to assist business impacted by COVID-19 which include:

Payment Deferral - Deferring by up to six months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise
Quicker access to refund - Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to
Pay As You Go (PAYG) instalment Variation - Allowing businesses to vary PAYG Instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.
Interests and penalties Remission - Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities
Low interest payment plans - Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter low interest payment plans.

However, there are limitations on the above concessions:

Employers will still need to meet their ongoing super guarantee obligations for their employees.
Above assistance measure will not be automatically implemented. Anyone impacted by COVID-19 is advised to contact:

Contact Our office on 03 9066 0400 request assistance via tax agent
The ATO’s Emergency Support Infoline 1800 806 218.

COVID-19 and Superannuation

In response to COVID-19, the Government has announced changes including reducing minimum super pension drawdown rates and expanding early release of superannuation funds.

Super/pension drawdown rates

The Government has announced a temporary reduction in the minimum drawdowns for many superannuation pensions.

Generally people with an account-based pensions who are under age 65 need to draw at least 4% of their pension balance as a pension payment each year, with the percentage increasing with age.

Under the changes announced, the minimum drawdowns will be reduced by 50% for the 2019/20 and 2020/21, ie. In the above example the minimum draw down is now 2% of their pension balance.

Early access to superannuation

The Government is allowing individuals affected by the Coronavirus to access up to $10,000 of their Superannuation in the 2019-20 financial year and a further $10,000, in the 2020-21 financial year.

Summary

While superannuation helps people save for retirement, the Government recognises that for those significantly financially affected by the Coronavirus, accessing some of their superannuation today may outweigh the benefits of maintaining those savings until retirement.

Eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for approximately three months (exact timing will depend on the passage of the relevant legislation).

Eligibility

To apply, for early release you must satisfy a certain eligibility criteria. Please contact our superannuation specialist Victoria Kogan or your regular knp contact to discuss the eligibility criteria further.

People accessing their superannuation will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink payments.

Other considerations

Cashflow management

Although it will be difficult to predict cashflows given the current economic uncertainties, it may be worthwhile to review cash outflows from your business. You may wish to think about what expenses are non-essential or can be reduced or what is the break-even point for your business to continue to be sustainable given the current circumstances? knp can assist in breakeven analysis and cashflow management.

Apply for rental reductions

Consider speaking to your landlord to discuss the possibility of a reduction in rent or extended payment terms on rental payments in light of the virus outbreak; landlords may be open to lease variations. knp can assist you in applying for rental relief from your landlord.

Self-employing

As the government has introduced the Boosting Cash Flow for Employers measure, you may wish to consider remunerating yourself as the director of a business. Access to the stimulus package is being made available to employers having employed prior to 12 March 2020 and will be made applied to activity statement lodgements. Prior to enacting this strategy please contact our office.

Loan & bank related assistance

Should you experience financial difficulty in these trying times, the four major banks have announced initiatives to assist both business and personal customer. These include but are not limited to interest rate reductions and deferral of loan repayments for up to six months. We suggest a review of your income and expenses to assess affordability of repayments. This can be useful information to the bank. We expect other financial institutions to also make available similar proposals to their clientele.

Human resources

It is important to continue to observe the safety and wellbeing of your employees. Where there is opportunity for staff to have work-from-home arrangements, consider the need for flexibility at this time in particular, differing household arrangements. Should there be a need for operations to be scaled back, consider reduction of employees’ hours, encouraging annual or long service leave in advance or at half pay. We urge you to review awards and contracts before making any decisions on staffing arrangements or changes.