Author: Tony Rule, Partner, TAG Financial Services
After a good start at helping businesses get through this virus-based recession, it appears that the politicians have gone back to what they do best – playing politics and selling spin. Oh well – it was good while it lasted!
Over the last week arguments and bickering have broken out between the federal government and the states, between the Coalition and Labour parties and even within political parties over re-opening the borders, what constitutes a special case and the appropriateness of Victoria’s “Road to Recovery” program.
Yesterday, one week after Premier Dan Andrews announced his “Road to Recovery” plan (which basically meant that ordinary businesses would not be able to resume for another six weeks) and two weeks before stage one of the JobKeeper program ceases, the Victorian State Government released their “Business Survival and Adaptation Package” costed at $3b.
It’s a great headline and whilst all assistance is welcome, this announcement does little to put cash into businesses to help cover costs right now. The key benefits for most businesses will be a $20,000 handout and a deferral (but not a reduction) of payroll tax for the full year ended 30 June 2021. The announcement is light on detail, but here is what we know so far…
Business Survival
The business survival components of the package include a third round of support to business owners, but this time for a larger amount and to a much wider group of businesses (up from $10,000 in the last round to $20,000 and up from payroll of less than $650k to payroll less than $10m). There is also survival assistance to specific industries and groups including:
- Licensed Hospitality Businesses can apply for a grant up to $30,000 based on venue capacity and location.
- A competitive grants program to support metropolitan and regional business chambers and trader groups so that they, in turn, can support their member businesses.
- Grants of up to $20,000 to help alpine businesses pay their service charge to Alpine Resort Management Boards
Business Adaptation
Additional funding, tools and resources have been announced to help businesses to adapt and prepare for opening under “COVID normal” settings including:
- A voucher program (not cash) to assist sole traders and small businesses to build digital capability
- Assistance to Victorian exporters to get products to market and establish new trade channels
- Expansion of the “Click for Vic” campaign to help Victorians to support local businesses
Waivers and Deferrals
Whilst this part of the announcement was called Waivers and Deferrals, the announcements are mainly deferrals including:
- Payroll tax deferral for the 2021 financial year,
- Bring forward of 50% stamp duty discount for commercial and industrial property in regional Victoria
- A six month deferral of the planned increase in the landfill levy
- 25% of this year’s congestion levy to be waived with the balance to be deferred
- Liquor licence fees to be waived for 2021
- Vacant Residential Land Tax for vacant properties to be waived for 2020
“Roadmaps” and “Packages” are great for grabbing headlines (and politicians will keep doing what politicians will do), but there has been little good news out of Victoria on a business front for many weeks. In the absence of political leadership, business owners need to take control of their business destiny as soon as possible and look to make the necessary improvements each and every day.
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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2020. Please do not reproduce without the expressed written consent of the author.