COVID-19 Second Stimulus Package
On Sunday 22 March, the Australian Federal Government delivered a second stimulus package estimated to be worth $66b. Key points for businesses:
Boosting Cash Flow for Employers:
- This assistance is aimed towards companies, including not-for-profits, with an annual turnover of up to $50m.
- 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.
- The cash injection will be linked to your company’s wages bill through the taxes an employer withholds during the year.
- The assistance will be paid via the current ATO system once the March BAS is lodged direct to your company’s bank account. The payments will be delivered by the ATO as a credit on your business activity statements.
Regulatory Protection and Financial Support for Businesses:
- The Government will establish the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SMEs) to get access to working capital to help them get through the impact of the coronavirus.
- Under the Scheme, the Government will guarantee 50% of new loans issued by eligible lenders to SMEs. This will unlock up to $40b in finance available for SMEs.
- There will be more flexibility in respect to creditor initiated insolvency and voluntary administration actions. Moving the outstanding amounts limits from $2000 to $20,000, and timing to respond to 6 months instead of 21 days.
- Relief for directors while trading insolvent will also be provided over the next 6 months.
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