COSBOA notes the media reports of a comprehensive and profound response to the COVID-19 crisis from the federal government.
Peter Strong, CEO of COSBOA, stated this morning “it appears the package will be the comprehensive response needed. At various meetings held this week and at a round table of COSBOA members and stakeholders held last week one recurring theme was the need for leadership from the whole community. If reports are correct then the Prime Minister and Minister Senator Cash in particular have provided that leadership.”
COSBOA notes the following reported announcements:
The largest component of the package will be a $6.7bn grant to about 700,000 small to medium-sized businesses, worth up to $25,000 each. Interestingly it will use the PAYG withholding tax system to assess the needs of struggling firms which hopefully saves businesses a lot of paperwork.
The instant asset write-off for businesses with turnover of up to $50m will be extended to those with revenues up to $500m and the purchases that can be claimed increases from $30k to $150k, a substantial increase.
There will be a wage subsidy of 50% for apprentice’s or trainee’s wage in small businesses from 1 January to 30 September 2020. Where a small business cannot afford to hold on to an apprentice, the subsidy will be available to a new employer. This is expected to be worth around $1.3 billion across 2019-20 and 2020-21.
Mr Strong added “what this means is that a small business employer can use the grant to do what is necessary depending upon the impact of the virus on their operations. They can hopefully keep the business open, perhaps run on a skeleton staff level or if there is a need to close for a short time they will be able to stand staff down and then bring them back to work when things improve.”
“Let’s see what else is there when the full package is announced later today.”