Yesterday, the Australian Government announced an update to its economic response to COVID-19 and stimulus package announced only a week ago on 12 March 2020.

The Australian Banking Association also announced on Friday a small business relief package from Australia’s banks.

While there are likely be further additions as conditions change, here is a guide to key supports available to impacted businesses.

Boosting cash flow for employers

The Government has enhanced the Boosting Cash Flow for Employers measure that was announced on 12 March 2020.

The measures include:

• The Government will provide up to $100,000 (previously $25,000) to eligible small and medium businesses and not-for-profits that employ people with a minimum payment of $20,000 (previously $2,000)
• Small and medium sized business entities with aggregated annual turnover under $50 million that employ workers will be eligible
• Under this enhanced measure, employers will receive a payment equal to 100% of their PAYG withheld (previously was 50 per cent) with the maximum increased from $25,000 to $50,000, the minimum payment being $10,000
• An additional payment (up to $50,000) will be introduced for the period July to October 2020
• Eligible employers will be entitled to the additional payment which will equal the total amounts the employer has received to 30 June 2020
• The payment will be delivered by the ATO as a credit in the activity statement system from 28 April 2020 when they lodge their BAS or IAS
• Quarterly lodgers will be eligible in both the March 2020 and June 2020 BAS’s
• Monthly lodgers will be eligible to receive the payment for the lodgment months of March 2020, April 2020, May 2020 and June 2020
• This payment will be tax free and will be automatically calculated by the ATO

Temporary Relief for Financially Distressed Businesses

Temporary measures have been introduced to support otherwise profitable and viable businesses that may face financial distress from the impacts of COVID-19.

The measures include:

• A temporary increase on the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000
• The statutory timeframe for which a company is required to respond to a statutory demand will also increase from 21 days to six months
• Temporary relief from Directors’ personal liability for insolvent trading will apply with respect to debts incurred in the ordinary course of the company’s business to allow companies to have the confidence to trade through COVID-19
• These measures outlined above will apply for a period of six months only

Coronavirus SME Guarantee Scheme

The Government will establish the Coronavirus SME Guarantee Scheme to help small and medium enterprises SMEs access working capital to help them get them through the impact of the coronavirus.

The measures include:

• The Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs
• The support will enhance lenders’ willingness and ability to provide credit to SMEs with the Scheme able to support $40 billion of lending to SMEs
• It further supports the Reserve Bank of Australia’s announcement of a $90 billion term funding facility that will reduce the cost of lending, with particular incentives to lend to small and medium enterprises
• The Government will guarantee up to $20 billion to support $40 billion in SME loans.

Apprentice Subsidy

The measures announced on 12 March 2020 have remained the same, aimed at continuing the development of a skilled workforce and retaining apprentices and trainees.

The measures include:

• Employers of apprentices or trainees, will be eligible for a 50% subsidy on all apprentice/trainee wages paid from 1 January 2020 to 30 September 2020
• Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter)
• The subsidy will be available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee X Where a business is unable to retain an apprentice, this subsidy is available to a new employer

Legislation will be introduced into Federal Parliament today to put these measures into effect.