Support Packages for Victorian and NSW Businesses

Australian businesses are again feeling the pinch financially as the second year of the COVID-19 pandemic continues to unfold.

Businesses along the east coast particularly are in a state of uncertainty. As a result the Federal Government has expanded the range of financial support available. 

In addition to the State-specific support below there is also the COVID-19 Disaster Payment. This is a support payment for workers and is a lump sum to help workers unable to earn income due to a public health order in their state. The amount varies by location and the individual's circumstances and is accessed via Services Australia (Centrelink). More information is available here:-  https://www.servicesaustralia.gov.au/individuals/services/centrelink/covid-19-disaster-payment

Financial support for both Victoria and New South Wales Businesses has Been Expanded

To help businesses keep their doors open, the Commonwealth is working with State Governments to greatly increase the amount of business support available.  But as the range of financial support available has been trickling out gradually as the situation has been worsening, it may be difficult to keep track of what’s available. 

Below we provide a breakdown of what’s now available for Victoria and NSW so that it’s easier for businesses to understand.

Round Up of Programmes Available for Victorian Businesses:-
Announced by the Prime Minister on the 28^th July, there are several new or expanded support programs now available for Victorian Businesses:-

1.   Business Costs Assistance Program Round Two July Extension - Closes 13th August 2021

This program aims to assist eligible small to medium businesses in the sectors most affected by the May through to July 2021 COVID-19 restrictions in Victoria. The original program closed on the 24th June 2021 but this extension provides the opportunity for businesses that did not previously apply, or who have since become eligible with the opportunity to apply for $4,800 in support. As with the original program, eligible businesses must have an annual Victorian payroll of up to $10 million, have an ABN, be registered with WorkSafe Victoria, operate in an eligible sector listed in the eligible ANZSIC classes and can show direct costs incurred due to the restrictions. 

2.   Business Continuity Fund

A $156 million Business Continuity Fund will be established to deliver $5,000 grants to up to around 30,000 businesses that remain impacted by capacity limits. 

24 eligible sectors are covered by the fund including gyms, cafes, restaurants, catering services and hairdressers. Businesses in the CBD will be eligible to receive an additional $2,000, recognising reduced foot traffic due to office density limits. To be eligible, you must have received or been eligible for the previous Business Cost Assistance Program.

3.   Licensed Hospitality Venue Fund 2021

The Licenced Hospitality Venue Fund will receive a $70 million boost, with grants of up to $20,000 to be made available to support licensed venues recognising that larger venues depend more on dine-in and have higher operating costs, so need more support than smaller operations.

Again, an additional $2,000 will also be made available to businesses in the CBD. To receive this funding, venues will need to have received or been eligible for the Licensed Hospitality Venue Fund 2021 and no further application is therefore required.

4.   Commercial Tenancy Relief Scheme and Landlord Hardship Fund

This package, to be fully funded by the Victorian Government, will deliver $80 million to provide support to landlords that provide rent relief to their tenants.

The Commercial Tenancies Relief Scheme will be reinstated to provide much-needed rent relief to small to medium commercial tenants and their landlords. Landlords will be mandated to provide rent relief proportional to the tenant's decline in turnover.

For example, if a tenant's turnover is only 40% of its pre-pandemic level, the business can only be charged 40% of its rent. At least half the rent relief must be in the form of a waiver, with the other half being provided as a deferral. Further details are not yet available around measurement of decline in turnover and periods of measurement but it is possible you may be requested to provide a letter from us to confirm your decline in turnover for the relevant measurement period.

There will also be a Landlord Hardship Fund of $80 million established to assist landlords who provide their tenants rent relief. Whilst there is no announcement yet as to whether these landlords will be eligible for any land tax relief, the State Revenue Office is accepting late applications for the (currently 25%) 2021 relief up until 31st December 2021. 

5.   Small Business COVID Hardship Fund

A new $85 million fund will be established to support smaller businesses that have not been eligible under existing business support funds.

Small businesses with a payroll of up to $10 million, who have experienced a 70 per cent or greater reduction in revenue, will be eligible for grants of up to $5,000.

6.   Alpine Business Support Program

Alpine Businesses will receive a further $9.8 million, delivering grants of between $5,000 and $20,000 to 430 Alpine-based businesses. This grant aims to offset the effects of restricted inter and intra-state travel during the peak winter season.

The funding also includes an additional $5 million of support to alpine resort operators and management boards.

Further information about each of these support programs can be found on the Victorian Government Website.

Programmes Available for NSW Business Support

With Greater Sydney set to remain in lockdown until at least the 28^th August the Federal and State Governments have jointly agreed to expand the COVID-19 Business Support Payment. An expansion of the existing JobSaver support program, additionally there are also some tax breaks around payroll, and grants for smaller businesses.

Here’s what’s available:

1. JobSaver -  Payment Amounts & Eligibility Requirements Have Been Expanded

What began in June as a once-off grant has gradually been expanded and rebranded into the Jobsaver payment, paid out weekly to eligible Sydney businesses.  This includes NFPs.
The changes announced on the 28^th July include raising the eligibility cap significantly. Previously, JobSaver was available for businesses with an annual turnover of up to $50 million. It’s now capped at $250 million, with the minimum turnover remaining at $75,000. This doubles the number of eligible businesses to 460,000 and ensures larger businesses can still receive support.
The maximum payment amount has also risen drastically, from $10,000 up to $100,000. The exact amount receivable will depend on the decline in turnover (30% or more) and the number of employees the business has. The payment will be calculated to cover 40% of payroll costs. 
Non-employing businesses, such as Sole Traders, will also receive $1000 a week, provided they can prove a 30% drop in turnover from the previous year.
Crucially, businesses will only be eligible if they keep on all their employees. No action is required if you have already applied and your payment will be automatically re-adjusted to reflect the expanded program. 

2. One-off COVID-19 Business Grants

The forerunner to the JobSaver program, the one-off COVID-19 business grant is still listed as available on the Business NSW website, Applications are open until the 13th of September. 
This grant is to help businesses cover costs accrued during the first 3 weeks of lockdown. Three different grant amounts will be available depending on the decline in turnover experienced over a minimum 2-week period from 26 June 2021 to 17 July 2021, compared to the same period in 2019:

• $7,500 for a decline of 30% or more
• $10,500 for a decline of 50% or more
• $15,000 for a decline of 70% or more.

These one-off payments will be available to businesses with a turnover between $75,000 and $10 million. As with the JobSaver program, businesses will only be eligible if they don’t lay off any employees. 

3. COVID-19 Micro Business Grants

For smaller businesses with an annual turnover between $30,000 and $75,000, fortnightly payments of $1,500 are available. To be eligible, you’ll need to prove a loss in revenue of 30% or more, and the business must provide the primary source of income for the person associated with the business.

4. Payroll Tax Deferral

Businesses will also have the option to defer their payment of the 2020-21 annual reconciliation, as well as the July and August 2021 monthly return periods, until the 7th of October 2021. Interest-free repayment plans for up to 12 months will be available.

This deferral will be made available to all NSW businesses.

5. Payroll Tax Deduction

For NSW businesses with grouped Australian wages of no more than $10 million, a 25% reduction to 2021-22 payroll tax liability will be made available to help reduce overheads.
Once again, eligible businesses will have to prove a 30% decline in turnover.

If you’re interested in finding out more, The Business NSW website provides a succinct breakdown of these 5 programs, including instructions on how to apply to each of them.

To our NSW clients – if you are applying for JobSaver or another grant, please contact us because you’ll need us to sign off on your decline-in-turnover test.

If your Victorian-based business is likely to receive one of these support payments, don’t hesitate to get in touch also so that we can help you understand how it will affect the rest of your finances, including taxation.

We all know how difficult lockdowns can be for small businesses and indeed the population as a whole. If you need to discuss any aspect of these offerings or help with managing your business during these difficult times, please don’t hesitate to get in touch.

Stay safe.