As we all come to terms with the short-term and unknown longer term implications of the Coronavirus, and what a Stage 3 Lockdown could mean, the Federal and State Governments have been on the front foot announcing a series of measures to assist businesses and individuals during this difficult time.
The swift reaction by hospitality and retail businesses of standing down or sacking workers within just a few days of self-isolation announcements was somewhat unexpected but evidence of the ‘everyone for themselves’ survival instinct that occurs in such uncertain times. A summary of the major policy announcements so far include:
- The minimum pension drawdowns for 2019-20 and 2020-21 have been cut by 50%, as they were during the GFC. That means if you are under 65, you only need to draw 2% of your 1 July 2019 balance, or 2.5% if between 65-74. The same discount applies for each of the other age brackets.
- For small businesses, the ATO is offering a Cash Flow Boost, by crediting any business activity (BAS) or PAYG amounts that are payable on a monthly or quarterly basis. Specifically, businesses with turnover of less than $50m will not be required to pay PAYG to the ATO on behalf of their employees where it is less than $50,000. In fact, every business will be afforded a $10,000 credit whether they withhold tax or not.
- The Federal Government is offering early access to superannuation under a loosening of the hardship provisions. This will allow those who are unemployed, eligible for job seeker payments or have been made redundant or lost working hours of 20% or more since 1 January 2020. It is limited to $10,000 this financial year and next.
- Closer to home, the Victorian State Revenue Office will be refunding payroll tax paid by businesses thus far in 2019-20 but only for those with payroll below $3.0m. This is a case refund and no further amounts will be payable for 2019-20 or the first quarter of 2020-21.
It’s worth noting this is simply the first round of support measures which come on top of the various actions taken by the Reserve Bank in recent days. Both State and Federal Government’s appear acutely aware of the risk that mass unemployment would have for the future of the Australian economy.