The government has announced a comprehensive package to help small businesses that have experienced direct fire damage, or have been indirectly economically impacted by the bushfire crisis.
In a joint statement issued by the Prime Minister, Treasurer and Minister for Employment, Skills, Small and Family Business, the government has announced top-up grants to eligible small businesses and non-profit organisations of up to $50,000, tax-free, and loans of up to $500,000 for businesses that have suffered significant asset loss or a significant loss of revenue.
The loans are envisioned to be for up to 10 years and used for the purposes of restoring or replacing damaged assets and for working capital. They will be available with a repayment holiday of up to two years, with no interest accruing during this period. The subsequent interest rate would be set at 50 per cent of the 10-year Commonwealth government bond rate (currently around 0.6 per cent).
The government is also due to deliver a $3.5 million Small Business Bushfire Financial Support Line as well as to fund 10 additional financial counsellors with the ability to provide advice to around 100 small businesses a day.
“We want to ensure small businesses have access to the information that they need, when they need it. The support line will be staffed by small-business specialist financial counsellors who will be able to provide information on the assistance and support available to small businesses in bushfire-affected regions,” the statement reads.
As part of the government’s tax relief plans, the Commissioner of Taxation has agreed to provide a number of assistance measures to businesses in identified bushfire-impacted postcodes to help to alleviate cash flow pressures and assist these businesses with their recovery efforts.
In particular, taxpayers in impacted postcodes will now have until 28 May 2020 to lodge and pay business activity statements and income tax returns. Impacted businesses that pay their Pay-As-You-Go instalments quarterly are also allowed to vary these instalments to zero for the December 2019 quarter and claim a refund for any instalments made in the September 2019 quarter.
The government is hoping that these measures will assist small businesses with much-needed cash flow support during this difficult time.
‘We’ll help you sort out your tax affairs’
In a separate statement issued by the Commissioner of Taxation, Chris Jordan said he hoped the additional time – on top of the two-month extension already granted – would give people the breathing space they need to recover and start to rebuild.
“If you’ve been impacted by these bushfires, we don’t want you to be concerned about your tax affairs. Now is the time for you, your family and your community. We’ll help you sort out your tax affairs later.”
Additionally, Mr Jordan announced that the ATO is fast-tracking any refunds that are due to taxpayers in the impacted regions.
“If you run a business and you’re expecting a refund on, for example, as a result of GST credits due to large purchases to replace stock, I encourage you to try to lodge or ask your tax professional to lodge your activity statements on your behalf. Refunds generated by lodging may provide some helpful temporary cash flow relief during these difficult times,” Mr Jordan said.
The ATO will also be remitting any interest and penalties applied to tax debts since the commencement of the bushfires that have been applied to accounts of individuals and businesses located in impacted regions.
Last week, Senator Michaelia Cash hosted what has been termed a “historical meeting” by COSBOA CEO Peter Strong to discuss the assistance needed for small businesses hit by bushfires.
Mr Strong announced at the time that the meeting brought together “not just the normal faces we see from peak bodies”, but “people who have been living with these fires for days and weeks and continue to do so”.
“The community people in the room and on the phone are frankly magnificent, and they show why we fight for small business – because they are amazing people. Currently too many of them, as well as their employees and their communities, are experiencing stress and crisis. It is probably more than 300,000 business people and their employees.”
Mr Strong has since told the ABC that the cost of the government’s announced aid could be close to a billion dollars.