A guide to the Government’s coronavirus stimulus and economic response
Looking after your business
Much of what is happening around the coronavirus may feel uncertain. Here is a summary of the Australian Government’s economic response and various coronavirus stimulus packages, the areas that have been targeted, together with some key resources to check for further information.
Support for businesses
Supporting the flow of credit
Supporting individuals and households
JobKeeper wage subsidy
- The payment will apply to full-time, part-time and casual workers, as well as sole traders.
- Casual workers must have been with their employers for 12 months or more.
- Employees must be on the books as at 1 July (previously 1 March, they may have since been fired but can be reinstated)
- Businesses with turnover under $1 billion, if they have taken a 30% revenue decrease.
- Businesses with turnover over $1 billion, if they have taken a 50% revenue decrease.
- Australian Charities and Not for profits Commission-registered charities (excluding schools and universities), if they have taken a 15% revenue decrease.
- The business is not subject to the Major Bank levy.
- From 28 September 2020, businesses and not-for-profits will be required to reassess their eligibility with reference to actual turnover in the June and September quarters 2020.
- UPDATE: Given the Victoria resurgence and lockdown, eligibility requirements are being relaxed to only show declines in turnover in the September quarter. After 4 January, businesses will only have to show a fall in the December quarter instead of each of the June, September and December quarters.
- Eligible businesses will receive a flat payment equal to $1,500 per employee per fortnight for up to 6 months.
- From 28 September 2020 to 3 January 2021, the payment rate will be:
- $1,200 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
- $750 per fortnight for other eligible employees and business participants.
- From 4 January 2021 to 28 March 2021, the JobKeeper Payment rates will be:
- $1,000 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average and for business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
- $650 per fortnight for other eligible employees and business participants.
Supporting flow of credit
1. Support for immediate cash flow needs for SMEs
What: To establish a loan guarantee arrangement between the Government and participating banks to cover the immediate cash flow needs of SMEs. The Commonwealth will guarantee 50% of an eligible loan to small business impacted by the virus.
Eligibility: Banks, non-bank lenders, SMEs, sole traders and not-for-profits with less than $50 million turnover per year, must be new or existing customers, no refinancing of existing customers.
Loan Terms: From April to 30 September 2020:
- Up to 3 years and granted within the next 6 months, starting 1 April 2020, repayment-free for 6 months. Unsecured, for working capital.
- Loans can be used for a broader range of business purposes, including to support investment in a period of economic recovery.
- The maximum loan size will be increased to $1 million per borrower.
- Loans can be up to 5 years with the six month repayment holiday will be at the discretion of the lender.
- A loan can be either unsecured or secured (excluding commercial or residential property).
How much: Up to $1 million
When: Early April and available for new loans until 30 June 2021
Fact sheet: Supporting the flow of credit
2. Quick and efficient access to credit for small business
What: Temporary exemption from responsible lending obligations for lenders.
3. RBA – supporting the flow and reducing the cost of credit
What: A term funding facility for the banking system where Banks will have access to at least $90 billion in funding at a fixed interest rate of 0.25% to support households and businesses. A further easing in the cash rate to 0.25% is meant to encourage additional lending.
4. Support for non-ADI and smaller ADI lenders in the securitisation market
What: Provides the Australian Office of Financial Management with an investment capacity of $15 billion to invest in structured finance markets used by smaller lenders and non-ADIs.
5. APRA – ensuring banks are well placed to lend
What: The Australian Prudential Regulatory Authority has made temporary changes to its expectations regarding bank capital ratios. The changes will support banks’ lending to customers, particularly if they wish to take advantage of the new facility being offered by the RBA.
Australian Government’s Economic Response:
Visit the Treasury website
Government’s specific measures for businesses:
Visit the Government’s Business website
Australian Taxation Office:
Visit the ATO website
The latest Government updates, news and response:
Visit the Government’s website
The latest health information:
Visit the Department of Health website
Updates from the Prime Minister:
Prime Minister of Australia website