The State Governments of Australia including Queensland, New South Wales and Western Australian have announced their plan to support the SMEs in light of the COVID-19 outbreak. Below is the summary of the packages announced.
Queensland
The QLD Government will offer $500m in loans, and extend payroll tax deferral to all affected businesses.
The $500m concessional loan facility will comprise of loans up to $250,000 with an initial 12-month interest-free period.
Judging from the popularity of its initial payroll tax deferral available to small and medium businesses, the QLD Government will extend the offer of a six-month payroll tax deferral to all affected QLD businesses.
New South Wales
The NSW Government has announced the waiver of payroll tax for businesses with payrolls of up to $10m, for the months from April to June 2020.
Also, the payroll tax threshold will be raised to $1m in 2020/21, thereby bringing forward another round of payroll tax cuts for eligible businesses.
As part of its support package, additional measures include waiving of fees and charges for small businesses, employment of additional cleaners of public infrastructure, and bringing forward maintenance of public assets and capital works.
Western Australia
On 16 March 2020, the Western Australian government announced measures to attempt to alleviate cash flow concerns of businesses of the economic downturn from the Coronavirus pandemic.
Unlike other state and federal governments, this announcement included both cash flow relief in terms of deferred payments, but also grants direct to businesses.
One-off grants to small businesses
Western Australian businesses which have Australian taxable wages between $1m and $4m will be eligible for a one-off grant of $17,500. Group employers are only eligible for one payment.
At this stage, it appears the grant will be received by way of a cheque, paid in July. Revenue Online WA is requesting that all eligible taxpayers to review their contact details on their website to ensure their postal address is up to date.
Deferral of payroll tax payments
The deferral of payroll tax payments for small and medium businesses is intended to run from the month of March through to June 2020.
The 4-month deferral will be only be granted by the Commissioner of State Revenue, with applications to be made via an online application form.
An application to defer monthly and quarterly payments will be considered if the business:
has Australian taxable wages of $7.5m or less (including groups), and
can demonstrate that COVID-19 has directly or indirectly affected turnover, profit, customers, booking or supply contracts.
If the application is approved, payments will be deferred for the 4 months. However, all returns are still required to be lodged by the due date, and all catch up payments are required to be made by 21 July 2020.
Bringing forward payroll tax threshold
The currently legislated change to the payroll tax threshold, from $950,000 to $1m, due to apply from 1 January 2021, will now apply from 1 July 2020.
As a result, some business may intend to (or will) go under the threshold from 1 July 2020. This means an employer may look to cancel their registration going forward can do so 6 months earlier.
