The Victorian government recently introduced a $3 billion support package for businesses impacted by the state’s prolonged COVID-19 lockdown, a significant effort to place the economy to re-open in the coming months.
Unveiled by Premier Daniel Andrews the new round of government stimulus doubles the dollar amount of support provided to businesses during the pandemic, now worth $6 billion.
Broadly speaking, the new package is divided into three parts:
- Business survival grants, including $1.08 billion in funds to assist businesses transition out of stage four;
- Aid for business adaptation, including $44.2 million to enable small and medium-sized businesses to get back on track after the pandemic;
- Waivers and tax deferrals worth $1.8 billion to relieve the pressure on businesses that are struggling to rebound in 2020-21.
While many of the programs are not yet available for application, and many specifics are required, we have summarised what we know so far, highlighting each element into relevant segments.
Business Survival: How to access $1.08 billion in grants?
Under the new support package, $1.08 billion has been allocated to grant projects to assist small and medium enterprises get up and running.
This includes the third round of the Business Support Fund and separate initiatives for licenced hospitality venues and alpine resorts, as well as new grants for chambers of commerce and business associations.
Business Support Fund: Round three
You may recognise the Victoria Business Support Fund as a series of $10,000 to $20,000 grants made available during the second wave in the state.
On 13th September, the government announced a third round, worth $822 million, to provide up to $20,000 for businesses with payrolls of up to $ 10 million.
This is how it works:
- Businesses with payrolls of less than $650,000 in 2019-20 will receive $10,000.
- Businesses with payrolls between $650,000 and $3 million in 2019-20 will receive $15,000.
- Businesses with payrolls ranging from $3 million to $ 10 million will receive $20,000.
To be eligible, companies must engage in the JobKeeper Scheme, hire people registered with WorkSafe and be registered for GST.
Sole entrepreneurs without employees will not be able to access this scheme.
Applications are not open yet however watch this space.
Licensed hospitality venue grants
In addition to the Business Support Fund, $251 million has been committed to fund grants of up to $30,000 for licenced pubs, clubs, hotels, bars, restaurants, and reception centres.
This initiative expands the current Hospitality Business Grant programme, which provided up to $25,000 in one-off grants.
A further $4.3 million has been promised to provide grants of up to $20,000 to Alpine businesses to help pay resort fees.
Business chambers and associations
A total of $3 million has been allocated to “competitive” grants to assist chambers of commerce and industry associations in the introduction of initiatives that allow member companies to get back on their feet.
Business Adaptation: $44.2 million available for SME’s getting back on track
This section of the support package is primarily intended to provide opportunities for re-tooling, adaptation, and readiness for re-opening under “COVID standard” settings.
It involves a $20 million voucher initiative to assist sole traders and small businesses in expanding their digital capabilities, effectively allowing the purchase of off-the-shelf software-as-a-service (SaaS) products such as Shopify.
It will also finance training and seminars for company owners seeking to transfer their businesses online because of the pandemic.
In addition, $15.7 million has been pledged to boost Victoria’s export market, including resolving logistics and supply chain concerns during COVID-19.
Finally, another $8.5 million has been spent on growing the marketing and promotional activities behind the Click for Vic campaign — a government program that supports independent e-commerce and hospitality businesses.
The program, launched during stage four, has already provided 211,000 leads to businesses on the website, cited by the Victorian government.
Victoria waives and defers $1.8 billion in taxes and fees
Victoria will forgo charging or otherwise delay $1.8 billion in fees and taxes in 2020-2021 to relieve the pressure on businesses affected by the coronavirus epidemic.
The majority of this will come from $1.7 billion in payroll tax deferrals, which will continue for the complete 2020-21 fiscal year.
Although the state government has already returned $540 million in payroll tax for the financial year 2019-2020 and afforded full concessions to other businesses, the 2020-21 proposal is not to abolish the payroll tax obligation however to postpone it until 2021-22.
All companies with payrolls of up to $ 10 million will be qualified for deferrals, but the government has yet to decide whether this will be implemented automatically.
Such exemptions and deferrals shall include:
- A commitment of $41 million to put in a 50% duty stamp discount for commercial and industrial property owners
- A $33 million deferral of a planned increase in the landfill levy for six months
- A pledge of $30 billion to waive the 25% congestion levy in 2020, with pending balances deferred
- Liquor licence fee exemptions of $27 million for 2020
- A $6 million pledge to waive vacant residential land tax in 2020.
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