Tim Quinn
AUSTRALIA AT A GLANCE
Owing in part to our geographical isolation, Australia has avoided the worst health impacts of Covid19, with deaths from the virus numbering under 100 in our country of 25 million people. At the time of writing on 27 April the country looks likely to be slowly “reopened” over the coming weeks. Azure Group made an early decision to operate remotely and we have been actively supporting our clients throughout without interruption, forming Centres of Excellence to handle both stimulus and human resources issues.
As an active participant in the global economy we have not been spared the effects of the global economic downturn, and mandatory isolation has come at a significant cost. Two of our largest exports, education and tourism, are especially sensitive to isolation requirements. Our second largest airline, Virgin Australia, has entered administration with further corporate failures on the horizon.
Government intervention has provided economic stimulus at both the Federal and State levels, with budgets unlikely to return to surplus for a number of years as a result of the urgent measures required.
Australian Government Direct Support
The Federal Government, known as the Commonwealth, has provided the bulk of the economic stimulus, at great expense. Most measures to date have been aimed at keeping people in work and accordingly we have not seen the individual stimulus payments utilised by other countries or that Australia offered during the GFC.
The JobKeeper program aims to support businesses and keep people employed by subsidising wages of employees to the tune of $1,500 per fortnight per employee for those businesses who have seen their revenue fall – for most businesses by 30% or more. Casual employees with fewer than 12 months of employment are not covered, nor are many non-citizens.
Another measure, Boosting Cash Flow, provides direct tax credit of between $20,000 and $100,000 depending on the size of an eligible business’ payroll – this time without any fall in revenue required. There has been some criticism that these measures are too broad and not well-focused, however the Government has responded that this is by design and both measures have attracted support from all sides of politics.
Our main unemployment support, JobSeeker (not to be confused with JobKeeper) has been given a temporary boost to $1,100 per fortnight, with eligibility criteria eased.
Small business loans of up to $250,000 have been 50% guaranteed by the Federal Government with generous repayment terms, aimed at easing access to capital.
Childcare has been made free to use for parents, again with the stated intention of incentivising work, with the Government supporting childcare services by paying 50% of these services’ normal revenue. However, the loss of their remaining 50% of revenue has meant the industry has been severely affected by the compulsory measure.
Other Australian Government Support
The Australian Taxation Office has been directed to exercise its discretion when chasing tax debt and has shown flexibility both in terms of setting reasonable payment arranging and waiving penalties and interest where appropriate.
The Export Market Development Grant scheme unexpectedly paid out the complete entitlement to eligible applicants, in previous years this had been only paid out on a “cents in the dollar” basis. The pool of funding was also increased for the coming financial year.
Research and Development Incentive (R&D) registration deadlines have been moved from April to September to allow applicants more time to prepare the significant documentation required.
State support
Support has also been offered by the States that make up Australia, to varying degrees. The States have offered partial waivers of payroll and land taxes and also put in place measures to support commercial tenants (and in some states residential tenants) with rent deferrals and waivers. There have been smaller grant programs in place to support businesses who have been shut down as a direct result of enforced isolation.
Want to know more?
You can read all our news releases and information relating to the Government Stimulus measures in Australian through our website Azure Group.
We also encourage you to speak to any of your clients that may have operations in Australia who are finding it challenging to work through the various stimulus arrangements the government have on offer. Through our centres of excellence, we are well equipped to provide additional support as required.
XLNC ARCHIVE | 27 APRIL 2020