How state governments are supporting small businesses

Stephanie Palmer-Derrien
Apr 07, 2020, updated Apr 09, 2020

Each state government has also announced a string of stimulus measures. Photo: TND

This article was updated on April 9. We will continue to update it as more information becomes available.

As the COVID-19 pandemic continues to wreak havoc on the Australian economy, the federal government has pledged a total of around $189 billion in stimulus packages to try to stop the country from crumbling.

While the federal government’s measures are available to small businesses country-wide, Australia’s state and territory governments are also pitching in to help entrepreneurs keep their heads above water and to keep people employed.

Recurring themes have included payroll tax waivers and deferral, waivers of licence fees, and investment in local projects to keep contractors in business and tradies in employment.

Some packages also include interest-free loans and a reduction in payment times for small businesses fulfilling government contracts, and advice and mentoring for business owners in crisis.

However, some governments have released more detail than others, so we will be updating this page as more information becomes available.

For now, here’s what we know.

New South Wales

The New South Wales state government unveiled its first stimulus package on March 17. On March 27, it updated its policy, expanding the reach of existing measures and pledging $750 million to creating a new ‘Working for NSW’ fund.

Payroll tax

New South Wales has waived payroll tax for the next three months, until the end of the financial year.

The waiver is available for businesses with payroll of up to $10 million and is expected to be applied automatically. Those businesses will also be given a three-month deferral on the payment of payroll tax.

Businesses with payrolls of $10 million or more will be able to defer payment of their payroll tax for six months.

The state is also bringing forward the next round of payroll tax cuts, meaning the payroll tax threshold will rise to $1 million in the financial year 2020-21.

Fees waived

The state government is scrapping fees and charges for businesses in vulnerable sectors, including for bars, cafes, restaurants and tradespeople.

The total allocated for this measure is $80 million, but it is not yet clear exactly which fees will be waived, or for how long.

The measure will be administered through Service NSW, and more details are expected to be communicated through this channel.

Gaming tax payments will be deferred for clubs, pubs and hotels for six months, as well as lotteries tax. However, this deferral is conditional on businesses using those funds to retain staff.

The parking space levy will also be deferred for six months.

Commercial tenancies

The government will defer commercial rent payments on government properties for businesses will less than 20 employees.

Investment in local projects

The government initially announced $250 million to spend on fast-tracking the maintenance of public assets, including social housing and fencing, as well as $500 million to bring forward capital works and maintenance.

Now, it is understood the new fund will build on these commitments.

It’s unclear how these contracts will be managed, but a spokesperson for the treasurer confirmed the measure is intended to provide opportunities “for businesses of all sizes,” and to create employment.

The government has also pledged $250 million to employ additional cleaning staff for public infrastructure, including public transport assets, schools and public buildings.

Read about the additions made in the second package here.

Victoria

Payroll tax refunds

The Andrews government’s $1.7 billion package includes refunds of payroll tax for small businesses.

Businesses with payroll of less than $3 million will be eligible for a full refund of payroll tax for the 2019-2020 financial year. Payments are set to begin this week and are expected to be issued automatically.

The government has stressed that this payment is a refund, not a loan.

Payroll tax deferrals

Small businesses will also be eligible for a deferral of payroll tax payments for the first three months of the 2020-2021 financial year. Payments for this period will now be due in January 2021.

Business support fund

Businesses in the hospitality, tourism, accommodation, arts, entertainment and retail sectors may also receive additional assistance through a new business support fund to be established by the Victorian government.

While details are yet to be released about what kinds of financial support will be available, the government said it will be administered in partnership with the Australian Industry Group, the Victorian Chamber of Commerce and Industry and the Australian Hotels Association.

The fund will support businesses that may not be eligible for payroll tax refunds because their payrolls exceed $3 million.

Businesses can register their interest in the fund by filling out this online form.

Payment times, waived fees and rent relief

The Victorian government has also pledged to pay all outstanding supplier invoices within five business days.

It is allowing commercial tenants in government buildings to apply for rent relief, and offering deferral of land tax payments for eligible businesses.

It is also waiving liquor licensing fees for 2020, for affected businesses.

Finally, an additional $500 million will be used to establish a ‘working for Victoria’ fund, to find employment for workers who have lost their jobs because of the coronavirus pandemic.

City of Melbourne

In addition to the state government’s support, the City of Melbourne has pledged $10 million to support local businesses and keep city residents in jobs.

The city is offering grants for SMEs totalling $5 million.

Up to $2000 is available for training and professional development; up to $5000 is available for investing in online and e-commerce activities; and up to $10,000 is available in dollar-for-dollar funding for capital works projects, to adapt to the changing conditions.

Businesses can apply for the grants here.

Fees have been waived for street trading and outdoor dining areas, for three months, as well as and fees for food act registrations.

The city is also offering cross-training and employment for 200 casual workers, who will be deployed to work on improving the cleanliness of the city.

Finally, the city is hosting a virtual business support summit, and launching a concierge service offering one-on-one advice to affected businesses.

Queensland

Payroll tax relief

Queensland businesses that have been affected by the COVID-19 outbreak may be eligible for payroll tax relief, refund or deferral.

All employers that pay less than $6.5 million in Australian taxable wages will be eligible for a refund of two months’ payroll tax.

They will also be eligible for a three-month payroll holiday, and a deferral of payroll tax for the 2020 calendar year.

Businesses that pay more than $6.5 million in wages, and have been directly or indirectly affected by the coronavirus, can also apply for the refund and deferral.

In this case, that means the business will have seen a negative effect on turnover, profit, customers, bookings, sales or supply contracts, compared to normal conditions.

Application forms for the refund, holiday and deferral are available here.

Interest-free loans

The state government is also offering low-interest loans of up to $250,000.

Loans will be interest-free for the first 12 months and are intended to help businesses keep employees on board and maintain their operation until the worst of the crisis has passed.

The Queensland Rural and Industry Development Authority is currently accepting expressions of interest for the loans. Businesses that are interested should contact the authority here.

Rent relief

Businesses that rent government premises will be given six months’ rent relief.

Diversification grants

Small businesses in the agriculture, food and fish exporting industries may be eligible for grants of between $2500 and $50,000 for diversifying their business and accessing new markets.

The grant program is expected to be open for applications in April, and additional guidelines and criteria will be available then.

Power bill relief

Sole traders and SMEs will also receive a $500 rebate on their electricity bills if they consume less than 100,000 kilowatt hours. The rebate will be applied automatically to all business electricity bills.

Fees waived

The government is also waiving various fees relating to small business, including variations of liquor licences, registration for inbound tour operators, commercial activity permits, marina charges and tourism rental payments.

Mentoring

Finally, the government is offering tailored advice for small businesses, as well as a series of workshops and forums, to help them expand their business overseas.

Support is also available in areas such as financial management and business planning.

Western Australia

Payroll tax grants

In Western Australia, an initial stimulus package announced earlier in March stated small businesses with a payroll of between $1 million and $4 million will receive a one-off grant of $17,500.

The grants will be paid automatically by cheque, and are expected to start being distributed by July.

However, there may be delays for businesses whose tax status changed during the 2018-19 or 2019-20 financial years.

Businesses with payroll of less than $1 million will become exempt from payroll tax from July 1, 2020, as the threshold increases six months ahead of schedule.

Payroll tax waiver

A second stimulus package said payroll tax will be waived for the four months from March 1, 2020, for businesses with an annual wage bill of less than $7.5 million.

This comes in addition to the previously announced grants.

However, it replaces the payroll tax deferral offering that was announced in the previous package.

Payroll tax deferral was available for employers that pay up to $7.5 million in taxable wages and have been directly or indirectly affected by the COVID-19 outbreak.

It does not appear that businesses will have to prove they have been affected in order to claim the waiver. But the state Treasurer has encouraged businesses that have not been affected to continue paying tax as normal, so the funds can be best used to help those that have suffered.

Affected businesses will also be able to apply for an interest-free arrangement for penalties related to late payroll tax payments.

Fees waived

In its second stimulus package, the WA government also said it will waive fees for small and medium-sized businesses that have been affected by COVID-19.

This includes licences for building services, plumbers and electricians; tourism businesses operating in national and marine parks; fishing licences; taxi authorisation fees; and more.

Renewal fees for liquor licences have been waived for 2020, and businesses that have already paid will be refunded.

Affected businesses will also be able to apply for an interest-free late-payment arrangement for penalties relating to transfer duty, landholder duty, vehicle licence duty and land tax, as well as payroll tax.

Energy bills

The government is offering small businesses a one-off credit of $2500 for Synergy and Horizon Power bills.

This is available to current customers, as of March 31, that use less than 50 megawatt hours per annum.

The credit will be distributed from May 1, to help businesses reduce future electricity bills.

The state government has also put a halt to any power or water disconnections due to late payments, and no interest will be charged on deferred bills.

South Australia

Following an initial $350 million pledge to safeguard the economy, the South Australian government has now upped the ante with a second $650 million state stimulus package, bringing the total to roughly $1 billion.

However, the package is still scant on the details.

The government has said it is expanding its economic and business growth fund, although details of what additional support this will deliver have not been clarified.

It has also pledged $300 million to support businesses directly affected by COVID-19, in a bid to prevent collapses and job losses, but it is not clear how that funding will be distributed.

A separate $250 million community and jobs fund will support sporting, arts and recreational bodies, and some other affected industry bodies. But, again, it’s not clear what this funding will provide.

Emergency cash grants

On April 9, the South Australian government announced businesses that have been affected by the pandemic may be eligible to receive a $10,000 cash payment to support the ongoing operation of their business.

To be eligible, business must employ South Australians, and have an annual turnover of more than $75,000.

They must also have an annual payroll of less than $1.5 million. It is understood that businesses cannot apply for the grant if they are eligible for the payroll tax waiver offering, however, it’s not clear at this time how this will work in practice.

A business will be eligible if it has had to close because of COVID-19 restrictions, or have had its operations severely affected.

If you’re eligible for the federal government’s JobKeeper package, it is understood you will be deemed ‘highly impacted’.

The funds are intended for business owners to support activities related to the operation of the business.

Finally, if the business has already received any grant funding to address issues caused by COVID-19, the value of previous grants will be deducted from the $10,000 on offer.

Business owners can register their interest in the grant program here. Applications are expected to open soon, and to run until June 1.

Payroll tax relief

South Australian businesses with an annual payroll of up to $4 million will be eligible for a six-month waiver of their payroll tax, starting from April.

Businesses with payroll of more than $4 million will be able to defer their payroll tax payments for six months, if they can show they have seen a significant impact to their cash flow as a result of the coronavirus.

Investment in local projects

The government has said it is working on delivering $50 million worth of projects to support local jobs and businesses. This will include road and hospital upgrades and new tourism infrastructure.

To secure funding, projects must be either labour-intensive, require a significant amount of materials and supplies purchasing, or both. They must also be ready for work to begin in a short space of time.

Fees waived

Finally, the government has implemented a waiver of liquor licence fees for the 2020-2021 financial year, for businesses forced to close as a result of the national social distancing restrictions.

Tasmania

Since initially announcing a $420 million stimulus package, Tasmanian Premier Peter Gutwein has more than doubled the territory’s package, bringing total investment to just shy of $1 billion.

Payroll tax waiver

Tasmania initially offered a waiver of payroll tax liabilities for some small businesses.

The waiver was available to those in the hospitality, tourism and seafood industries, and will apply for the last four months of the 2019-2020 financial year.

Now, it appears the government has extended the waiver, meaning these businesses will have payroll tax waived for the entirety of the 2019-2020 financial year.

Full details have not been released, but this is likely to involve payroll tax refunds, as well as the waiver.

Other businesses with payrolls of up to $5 million will also be able to apply for this package, but eligibility will be based on how significantly the virus has affected their business.

Further details on this criteria have not yet been released.

Interest-free loans

In the first package, the state government made $20 million in interest-free loans available to small businesses in the hospitality, tourism, seafood production and export sectors.

That has now been expanded to $50 million.

Businesses with turnover of less than $10 million will be eligible, and the loans are intended to be used for purchasing of equipment, or for restructuring business operations.

Loans will be offered interest-free for three years. Details on how to apply have not yet been released.

Small business grants

The government has also launched a new $40 million small business grants program. Half of this is set aside for an emergency grants program that offers businesses cash payments of $2500.

Fees waived

Tasmania is waiving fees for certain licences and leases applicable to small businesses.

These include a 50 per cent discount on liquor licensing fees and a waiver on application fees; waiving park entry fees for tourism operators; and waiving of some fisheries fees for 12 months.

The government will waive fees and charges on some motor tax for heavy vehicles, and vehicle registration for affected businesses.

Power bill relief

The second package also introduced a freeze on water and electricity bills.

Some small businesses will have their water and electricity bills waived for their first quarterly bill, received after April 1. Businesses on tariffs 22, 94, 82 and 75 will have their bills waived, as well as small businesses on market contracts that could access these tariffs.

Electricity bills will be capped for the next financial year, and water bills will be frozen.

Employment incentives

Grants of up to $5000 will be available to businesses that hire an apprentice or trainee in the tourism, hospitality, construction or manufacturing industries.

Similarly, a youth employment scheme will encourage businesses to hire young people, aged 24 and under, by offering a rebate on payroll tax for one year.

The government has also implemented a $100,000 tourism and hospitality training fund, in a bid to make sure the industry is ready to bounce back effectively when the crisis passes.

Investment in local projects

The Tasmanian government initially allocated $50 million to fast-track maintenance on public buildings over the next 12 months.

It has now extended the government loan scheme from $50 million to $150 million in a bid to keep projects flowing.

The investment is intended to help support local trade businesses and self-employed people in this sector.

Training and advice

The government is offering business continuity advice on cash flow and continuity, including from the Rural Financial Counselling service.

The full government package can be viewed here.

Northern Territory

On April 8, the Northern Territory government announced a new $180 million package for small businesses.

“Right now, a dollar that does not have to be spent on payroll or power prices is a dollar that can be spent on keeping a Territorian in a job,” Chief Minister Michael Gunner said.

Payroll tax

Small businesses that can show their business has been hurt by COVID-19 will have their payroll tax waived for a period of six months.

This waiver is available for employers that have a total payroll of less than $7.5 million, and that have seen a 30% drop in turnover.

Businesses with a higher total payroll that have also seen a 30% decline in turnover will be eligible for a six-month payroll tax deferral.

Bill relief

For small businesses that can show they have been negatively affected by COVID-19, the government is cutting power and water bills by 50%, for the next six months.

Rent relief

In a bid to help businesses struggling to keep up with the cost of their lease, the NT government has suggested it will offer commercial landlords the same support as other businesses receive.

However that help “comes with strings attached”, Gunner said.

If a tenant can “demonstrate hardship” because of the coronavirus and requests assistance from their landlord, the landlord must negotiate rent relief with them.

“Then, and only then, will the landlord be eligible for support like payroll tax relief, or any of the measures we have already announced.”

Small business survival fund

The Northern Territory government has launched a $50 million Small Business Survival Fund, offering grants to small businesses to help them adapt to changed trading conditions,

This will include helping them set up online stores or to pivot to delivery and pick-up restaurant services.

The fund is expected to open for applications on Friday, and more information is due to become available later this week.

Business improvement scheme

Earlier in the month, the government released a recovery plan, including a $20 million business improvement scheme.

Under the scheme, businesses will be eligible for grants of $10,000 for improving business premises. This can include new equipment, new fit-outs and physical changes to attract customers.

It is not currently clear what is required for eligibility.

If they can also contribute $10,000 of their own, they will receive an additional $10,000, for a total of $30,000 funding.

The government is also offering assistance to businesses that have to physically adjust to new social distancing rules, although details of the support are not yet available.

It has also encouraged banks to be flexible in dealing with businesses; asked landlords to consider reducing or deferring rental payments for businesses; and called on the private sector to be flexible in their contract arrangements.

Australian Capital Territory

Payroll tax waiver

The Australian Capital Territory is offering a one-off payroll tax waiver for businesses in the hospitality sector, for the six months from April to September 2020.

Businesses will have to complete an online application form, although this is not yet available.

Payroll tax deferral

The government is also allowing all businesses with payroll of up to $10 million to defer their 2020-2021 payroll tax payments, interest free, until July 1, 2022.

The deferral applies to all ACT businesses with Australia-wide wages of up to $10 million.

Again, there will be a form to fill in to apply for the deferral, which is not yet available.

Fees waived

The government is offering a 12-month waiver of all food business registration and on-licence liquor licensing fees, from April 1, 2020.

If registration has been prepaid, an additional 12 months will be added to the licence.

The government is also waiving vehicle licensing fees for ride-sharing operators, and taxi plate fees, for 12 months from April 1.

These fees will be waived automatically.

Electricity rebates

Businesses with electricity usage below 100 megawatts per year will receive a rebate of $750, regardless of their supplier, the government has said.

Again, this rebate will be issued automatically, with no need to contact suppliers.

Investment in local projects

The government has pledged $20 million to fast-track infrastructure projects and maintenance.

Funding will be available for jobs that can start immediately, that will employ local suppliers and workers, and that meet social distancing requirements.

The fund is expected to be used before the end of the financial year.

Advice

The ACT government is also offering a small business advice and support service, offering one-on-one business management advice. Business owners will be able to access up to four hours of subsidised, face-to-face tailored advice, plus access to online resources.

The government is also increasing subsidies for apprenticeship and traineeships, and offering access to training opportunities.

Business owners can call the business liaison line on 6205 0900.

This article was first published by Smart Company. Read the original here.