Through the constant occurrence of lockdowns businesses, especially in Victoria are experiencing a great deal of stress and uncertainty with how they will navigate these challenges and what the future holds for them.

Here is an update of support packages you should explore for both Victoria and other States. However, please be aware that there are closing dates, so it is important that you review these options immediately and ensure you action your application for assistance if you qualify. 

At this time, we strongly also recommend that you ask your accountant to investigate all possible entitlements for financial relief or support from the government as there are numerous opportunities constantly being introduced. However, each one has its own criteria of requirements.

VICTORIA GOVERNMENT COVID-19 SUPPORT PACKAGE

The Victorian government has announced a $143 million financial support package for small businesses affected by the recent lockdown that was implemented with very little notice just before Valentine’s Day. The four-part relief package offers support for small businesses and sole traders, offering cash grants and vouchers for businesses in those industries hardest hit by the five-day coronavirus lockdown which began on February 12.

Eligible salons will receive cash grants of $2,000. Approved businesses with an annual payroll of up to $2 million will be eligible for the grants. www.business.vic.gov.au/support-for-your-business/grants-and-assistance/circuit-breaker-action-business-support-package/business-costs-assistance-program

BOOST FINANCIAL SUPPORT FOR START-UP BUSINESSES
The Victorian Budget has committed a total of $186.2 million to the continued growth of Victoria’s start-up ecosystem, including salons. As part of the measure, $40 million will be distributed over the next four years to Victorian start-up agency LaunchVic to continue in its role in helping the state’s start-up ecosystem.

A further $60.5 million has been allocated to the Victorian Startup Capital Fund, leveraging up to $180 million in private sector investment, to inject much-needed early-stage funding into start-ups to help them become the scale-ups and unicorns of the future.


A further $10 million has been allocated to a Women Founders Angel Sidecar Fund, which will unlock a further $30 million in private sector equity to increase the number of women founders.

GOVERNMENT RELIEF PACKAGE FOR WA SMALL BUSINESSES
Here is what the package includes:

  • A $43 million package for small businesses and charities impacted by the 31 January 2021 five-day lockdown, including an electricity bill offset.
  • $17,500 grants for small businesses with a payroll between $1 million and $4 million.
  • JobKeeper payments extended to 28 March 2021 as well as the JobSeeker.
  • Early access to superannuation extended 30 June 2021.

VICTORIAN DIGITAL VOUCHER SCHEME AVAILABLE FOR SALONS
The Small Business Digital Adaptation Program provides eligible Victorian small and micro businesses, including salons, with rebates for selected digital products, as an incentive to build their digital capabilities.  To access the rebates, businesses must first trial this and then purchase one of the approved digital products, before receiving a rebate of $1,200 to use the product or service for 12 months.

The Victorian government has this week added new providers to the plan, including QuickBooks Online, Reckon Limited, Lawpath, Ecwid Inc, Trade Trak, MYOB, XERO, Squarespace, Square, and Shopify.

ATO INTRODUCES SIMPLIFIED METHOD FOR TAX DEDUCTIONS FOR WORKING-FROM-HOME BUSINESSES
Australian business owners and employees will have access to the shortcut method for claiming working-from-home tax deductions until the end of this financial year.  The Australian Taxation Office introduced the simplified method for claiming deductions in April, as the COVID-19 pandemic caused most Australian employees to move to remote working. The method allows taxpayers to claim a flat rate of 80 cents per hour for all running expenses while they work from home, instead of calculating costs for specific running expenses. Please check this with your accountant.

NSW GRANTS FOR WOMEN WHO WISH TO RETURN TO WORK

Women in NSW will be able to apply for grants up to $5,000 through a new Return to Work program which is part of the 2020-21 state budget. Acknowledging the obstacles women have faced at work throughout 2020, Premier Gladys Berejiklian said the funding would enable women to seek financial assistance and targeted support including mentoring and leadership training. The money can also be used for childcare, including before and after school care and transport, aimed at helping women transition back to work more freely.

NEW $10,000 GRANTS FOR SMALL BUSINESSES IN SOUTH AUSTRALIA

Following the first round, the South Australian Government is now unveiling the second round of $10,000 grants for small businesses that are still feeling the effects of the COVID-19 pandemic. The grants package comes as part of a $4 billion ‘adrenaline hit’ to the economy, expected to be unveiled in the budget. Available to small businesses, the grants are expected to assist some 10,000 entities, valuing the scheme at about $100 million. Grants will be available to cover outstanding or ongoing costs, such as rent, power bills, and raw material costs, a statement on the package said.

THE FOUR MAJOR BANKS AGREE TO PASS ON RATE CUTS TO BUSINESS LOANS
The four major banks – NAB CBA, Wespac and ANZ have agreed to pass the Reserve Bank’s rate cut on to borrowers, effectively lowering interest rates on some business loans. NAB is knocking 200 basis points off the interest rate of its unsecured QuickBiz loan for the next three months, which follows the first reduction of 200 basis points earlier in March. As the Reserve Bank’s actions on Tuesday feed through to the government’s SME guarantee scheme, NAB announced reductions of interest on business support loans late Wednesday. ANZ is also slicing rates for borrowers eligible for the government’s guarantee scheme.

SUPERANNUATION PROPOSED CUT FROM 15 PER CENT TO 7.5 PER CENT IN SUPPORT OF SMALL BUSINESSES
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has suggested the deferral of superannuation guarantee increases for two years and cutting the 15 per cent tax on compulsory employer superannuation guarantee contributions to 7.5 per cent for the same period-of-time. In a letter to the federal Treasurer, Carnell points out that the combined measures offset each other, ensuring that workers end up with a similar superannuation amount as they would have under the increase scheduled before COVID hit.
Ms Carnell said that by implementing this proposal, the federal government would be supporting small businesses and every Australian, giving them the chance of a dignified retirement.”

PHASE 2 OF THE SME GUARANTEE SCHEME NOW EXTENDED TO JUNE 2021

SME Guarantee Scheme will allow small businesses to access unsecured loans of up to 50% for up to five years. Phase 2 of this this scheme has just be rolled out.  The scheme offers the following:

  • maximum total size of loans of $250,000 per borrower
  • the loans will be up to three years, with an initial six-month repayment holiday
  • the loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

Phase 2 of the Coronavirus SME Guarantee Scheme will start on 1 October 2020 and run until 30 June 2021. Further details will be available soon.

SECOND STIMULAS CASH BOOST DUE WITH JUNE ACTIVITY STATEMENT
Businesses currently receiving the COVID-19 PAYG withholding credits are eligible for an additional cash flow boost after filing their June activity statements. Businesses with turnover below $50 million were handed credits based on tax they withheld for employee salaries, with varying amounts from $10,000 to $50,000 handed to eligible employers based on the number of staff they had in March. Businesses which received the initial cashflow boost are now eligible for additional support, worth as much as the initial payment, but split evenly across lodgements between June and September. The cash flow boosts will be processed automatically upon business activity statement (BAS) lodgements, but how much is paid for each period will depend on whether a participant lodge monthly or quarterly.

QUEENSLAND GOVERNMENT INTRODUCES SECOND ROUND OF GRANTS FOR SMALL BUSINESSES
Following lobbying from the Chamber of Commerce and Industry Queensland, the State Government also announced the second round of small business grants. Eligible small businesses will receive up to $10,000 from a $100 million fund. When the first round of small business grants was announced last month, they were snapped up in just four days.

ACCC ISSUES NEW RENT RELIEF RULING
The Australian Competition and Consumer Commission (ACCC) has ruled that small-business tenants may bargain with landlords if they have been adversely affected by the COVID-19 pandemic in a bid to gain some form of relief from rental payments.

Our solicitors, Pointon Partner Lawyers have helped many businesses mediate a compromised arrangement with their landlords.  If you are struggling in this area contact APAN as we can assist.  As a result of COVID-19 there are new laws now that are on your side.