COSBOA has welcomed the Australian Government’s economic plan released today in response to the challenges posed by COVID-19. Most importantly, COSBOA recognised the plan helped with cash flow, was targeted and proportioned according to need.
“This won’t just help small businesses, it will assist the whole of Australia maintain economic health,” COSBOA CEO Peter strong said.
Mr Strong congratulated the Government for its quick response. “This time last week we spoke to our members and submitted our proposal urging speed and significant assistance. This package adopts many of our proposals, like using existing government structures like the ATO, to administer relief, and including stimulus payments to low-income people or households already in hardship.”
He said “The economic support package is proportionate, timely and scalable, and has been delivered quickly. It contains, I think, learned lessons from the bushfires.”
COSBOA notes the following initiatives:
· The largest component of the package will be a $6.7b 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 $1.3b across 2019-20 and 2020-21.
· $4.8b to pay $750 to social security recipients, pensioners and veterans.
· Finally – there’s $1b to regions suffering disproportionately, like tourism, agriculture and education.
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.”
Mr Strong said he appreciated the collaboration with Government Minister’s who listened to COSBOA’s members. “This has Michaelia Cash’s fingerprints on it. She has helped get small business interests heard in Government.”