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Recent escalation in the spread of Coronavirus (COVID-19) across the world has seen swift responses by Australia’s Federal and State Governments in an attempt to protect jobs and the economy at large. A suite of stimulus packages are now available to support Australians through the conditions ahead, and in consultation with key insights from our trusted advisors at PwC and Deloitte, we’ve summarised the options available to your business as follows:
What packages are available?
On March 12, the Federal Government announced its first package of AU$17.6B in response to the economic impact of COVID-19. Further escalation of the crisis prompted a second package announcement on March 22, bringing the total State and Federal Government relief portfolio to AU$189B. With a core purpose to keep businesses operating and Australians in jobs once the crisis has abated, the majority of stimulus initiatives are focused on tax relief and deferment; offering significant benefit for short to mid-term cash flows.
Most stimulus measures include substantial concessions for capital investment. These comprise enhanced and accelerated tax write-offs for depreciable assets, in addition to cash flow support to small and medium-sized businesses and not-for-profit employers (including low interest loans to assist with the funding of working capital).States and Territories have also announced separate stimulus packages to support businesses; most of which deliver relief via reduced payroll tax. The majority of these are for businesses with less than AU$10M in aggregated wages, with some variation by State. The following table produced by PwC offers a clear outline of proposed measures per business size. Be sure to liaise with your tax advisor to understand the full potential benefit available to your business.
We are continuing to analyse hard markets in addition to increased demand for funding products and options.While several credit markets have dried up, premium funding is still available for businesses. With increased demand, we are talking to clients earlier on renewals and ensuring funding options are mobilised early. Through times of challenge and crisis, premium funding is one of the lowest forms of capital and can reduce cash flow stress considerably. Please contact your Honan representative if you’d like more information.
At Honan, we will continue to monitor all Government initiatives and liaise closely with our partners at PwC and Deloitte to bring you the most comprehensive business insights and insurance advice through COVID-19 and beyond.
The full PwC TaxTalk article can be found here: Link
Deloitte’s analysis of the tax and business COVID-19 relief packages: Link
The Australian Government’s Economic Response to COVID-19: Link
