What a difference 10 days makes. With the ink not dry on the legislation from round one (actually the legislative Bill has not even presented to parliament yet) its remarkable that we are today dealing with a second much larger round of stimulus measures.
So what’s in it for small business? Well its a bit of a mixed bag with some getting an even bigger hand and others missing out almost entirely. Let’s start with what seems to be the biggest losers in this – the sole traders with no employees. It was widely anticipated that round two would contain measures targeted to help sole traders that missed out almost entirely in round one. Let’s not forget that sole traders make up a large chunk of the Australian economy and many work very hard to provide for themselves and not be a burden on the system (and many accept an income from their business that is below minimum wage. No penalty rates. Of course all their prerogative). Anyway fast forward to today and round two really only provides for emergency access to super for up to $10,000 before 30 June 2020 and $10,000 after. That’s not a free-kick but rather their own money (albeit tax-free). Better than nothing but not the same as a $20,000 tax-free gift because you have one employee earning a few dollars a week.
As for other businesses – well the $25,000 has been ramped up considerably to a maximum of $100,000 split to $50,000 before 30 June 2020 and $50,000 after. This time the calculation rate is based on 100% of PAYG withholding rather than 50% which means it’s easier for employers to get the maximum amount. Easier but not necessarily easy! There is a new and even more convoluted payment process than previously so we won’t go into the detail here. Suffice to say that you should speak with your accountant to check if there is a way of maximising your entitlement.
Other measures include a government guaranteed loan scheme for small business but we question the benefit of that measure given that banks still have to run credit assessment and we can’t see them lending to any small business in financial distress – which will be about 99% of small businesses in a month.
