Rent Negotiation & Australian State/Territory Stimulus for COVID19

In this blog we focus on the Rent & the State & Territory Stimulus packages for Covid19.

Firstly, a number of businesses I'm speaking with have mentioned their landlords are not willing to reduce the rent due to Covid19.

I’d like to share the latest moratorium on the Commercial and Residential Leases.

If you business has been impacted by Covid19, you can negotiate with your landlord.

The following is directly copied from the Prime Minister’s cabinet statement.

“Commercial tenants, landlords and financial institutions are encouraged to sit down together to find a way through to ensure that businesses can survive and be there on the other side. As part of this, National Cabinet agreed to a common set of principles, endorsed by Treasurers, to underpin and govern intervention to aid commercial tenancies as follows:

• a short term, temporary moratorium on eviction for non-payment of rent to be applied across commercial tenancies impacted by severe rental distress due to coronavirus;
• tenants and landlords are encouraged to agree on rent relief or temporary amendments to the lease;
• the reduction or waiver of rental payment for a defined period for impacted tenants;
• the ability for tenants to terminate leases and/or seek mediation or conciliation on the grounds of financial distress;”

Also, since the moratorium was announced, the State Governments are in the process of waiving land tax for the landlords.
 

More Details Link - https://www.pm.gov.au/media/national-cabinet-statement

If you have more questions, this smart money article is a great guide.

NSW and Victoria Governments have announced land tax relief for landlords
 

There are a number of a state stimulus packages to assist business impacted by the Covid19 disruption. Here’s a highlight of the stimulus packages.

Please speak to your tax practitioner to ensure your tax records are up to date, so that you can make a claim.

The timing of these packages are critical.

The NSW Government is now making available $10,000 grants to eligible small businesses impacted by COVID-19.

Eligibility

• Have between 1-19 employees and a turnover of more than $75,000;
• A payroll below the NSW Government 2019-20 payroll tax threshold of $900,000;
• Have an Australian Business Number as at 1 March 2020, be based in NSW and employ staff as at 1 March 2020;
• Be highly impacted by the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 issued on 30 March 2020;
• Use the funding for unavoidable business costs such as utilities, overheads, legal costs and financial advice;
• Provide appropriate documentation upon application. 

Timing - Applications need to be in before 1^st of June 2020

Funding - $10,000 grants to provide fast relief for NSW small businesses

Link - https://www.nsw.gov.au/your-government/the-premier/media-releases-from-the-premier/10000-grants-to-provide-fast-relief-for-nsw-small-businesses-battling-covid-19/ 

• $450 million for the waiver of payroll tax for businesses with payrolls of up to $10 million for six months (the rest of 2019-20). 
• Payroll Tax – deferral of payroll tax for business with payrolls over $10 million for six months. 
• $56 million to bring forward the next round of payroll tax cuts by raising the threshold limit to $1 million in 2020-21.  
• $80 million to waive a range of fees and charges for small businesses including bars, cafes, restaurants and tradies. 
• Creation of a $1 billion Working for NSW fund to sustain business, create new jobs and retrain employees. 
• Deferral of rents for six months for commercial tenants with less than 20 employees in all Government-owned properties. 

This is important to share with you and your staff because this is the opportunity to re-train staff when the business is slow. Especially if you can couple this with the Job-Keeper program.

The 21 short courses include:

• eMarketing for Small Business 
• Engaging Customers Using Social Media    
• Writing and Presentation Skills
• Computing Skills
• Team Leader Skill Set
• Administration Skills for Team Leaders. 

Link: https://preview.nsw.gov.au/news/free-tafe-courses-to-support-nsw-pandemic

The Victorian Government Business Support Fund is now distributing $10,000 grants to eligible small businesses impacted by COVID-19 and is open for applications.

Eligibility

• Employ Staff
• Have been subject to closure or is highly impacted by shutdown restrictions announced by the Victorian Government to-date. For more information on affected sectors refer to the Non-Essential Activity Directions issued by the Deputy Chief Health Officer.
• Have a turnover of more than $75,000
• Have payroll of less than $650,000
• Meeting business costs, including utilities, salaries, rent

Timing - Applications need to be in before 1^st of June 2020

Funding - $10,000 grants to provide fast relief for NSW small businesses

Link - https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/business-support-fund

Other Vic Government Announcements

• The $500 million Working for Victoria initiative helps Victorians, including people who have lost their jobs due to the economic impacts of coronavirus (COVID-19), find new work opportunities. Some of these roles will provide vital contributions to our state’s response to the pandemic. We want to support as many Victorians getting back into work as quickly as possible. 
• Link - https://www.vic.gov.au/workingforvictoria 

Free TAFE Courses to support VIC

If a person is under 20 years old or is unemployed, there are over 40 courses available.

A person could also looking to change careers.

Link - https://www.gotafe.vic.edu.au/study/all-courses?q=&free-tafe=true

• Payroll Tax refund for two months’ worth of payroll tax for small and medium businesses and large businesses specifically impacted. Additionally, for small and medium businesses a three-month payroll tax holiday, and a twelve-month payroll tax payment deferral for any of these Queensland businesses. 
• Liquor licencing fees waived for venues that have had to close their doors, providing rent relief for businesses who rent premises from the state government and giving sole traders, small and medium businesses a $500 rebate on their power bill for this year. 
• $500 million concessional loan facility comprising loans of up to $250,000 with an initial 12 month interest free period for businesses to retain staff.  
• $8 million in funding relief for arts organisations through Arts Queensland. 

Link - https://www.business.qld.gov.au/

• Employ people in South Australia
• Have turnover of more than $75,000
• Have payroll of less than $1.5 million, and not entitled to a payroll tax waiver under COVID-19 support measures introduced by the state government
• Have an ABN and were carrying on the operation of a business in SA on 1 March, 2020
• Have been subject to closure or highly impacted by COVID-19 related restrictions^. Ie eligible for Job Keeper Program.
• Use the funds to support activities related to the operation of the business

Funding - $10,000

Timing - Apply by June 1, 2020.

Link - https://www.covid-19.sa.gov.au/latest-news/$10,000-emergency-cash-grants-for-small-businesses-impacted-by-covid-19

• $300m Business and Jobs Support Fund will be used to directly assist individual businesses and industry sectors facing potential collapse and the loss of thousands of jobs. For more information, and how to apply to the Funds, email: BusinessandJobsSupportFund@sa.gov.au ;  CommunityandJobsSupportFund@sa.gov.au 
   
• $250m Community and Jobs Support Fund – Community organisations, such as sporting, arts and recreational bodies, non-profit organisations and some other industry sectors will be assisted. 
   
• 6-month waiver for all businesses with an annual payroll (grouped) up to $4 million, eligible businesses won’t have to pay any payroll tax from April to September. 
• Employers with grouped annual wages above $4 million able to defer payroll tax payments for 6 months on demonstration of significant impacts on cash flow of coronavirus.

• A guarantee to continue providing a six month waiver of payroll tax any businesses whose operations are directly affected by the ‘prohibited activities list’ now, and into the future. 
• Waiving of fees for food business registration and liquor licensing fees (excluding off-license) and outdoor dining fees and a $750 rebate for small business owners to help with power bills. 
• Interest free deferrals of payroll tax commencing 1 July 2020 for all businesses up to a payroll threshold of $10 million. Small businesses are already exempt from payroll tax due to the highest tax free threshold ($2m) in Australia. 
• Additional funding of $7 million for non-government organisation partners to meet increased service demand for emergency relief will also be rolled out as part of the ACT Government Community Support package. 

Link - https://www.covid19.act.gov.au/economic-support/economic-survival-package/supporting-local-businesses-and-the-economy

• $17,500 grants for small businesses with a payroll between $1 million and $4 million.
• The $1 million payroll tax threshold (announced in October 2019) will be brought forward by six months to 1 July 2020.
• The WA Government will waive rental payments for small businesses and not-for-profit groups in State Government-owned buildings for six months.

• Payroll tax will be waived for four months for businesses with annual wages under $7.5 million (NB: this replaces the previous payroll deferral measure which was announced).
• One-off $2,500 credit on electricity bills for small businesses that consume less than 50MWh per annum. For more information read the statements on the Synergy and Horizon Power websites.
• Power and water disconnections will not occur and interest will not be charged on deferred payments until 30 September for small businesses facing financial difficulty due to COVID-19. Please note: This applies to Synergy and Horizon Power customers.
• Affected businesses can apply for interest free payment arrangements and for late payment penalties to be waved for a range of taxes and duties, including payroll tax, transfer duty, landholder duty, vehicle licence duty or land tax.

A range of business licence fees have been waived, including liquor licence renewal fees for 2020, which will be waived and refunds given to businesses that have already paid.

Link - https://www.smallbusiness.wa.gov.au/blog/wa-coronavirus-relief-package

• $50 million for the provision of interest free loans to businesses in the hospitality, tourism, seafood and exports sectors. The loans will be available to small businesses with a turnover of less than $10 million for the purpose of purchasing equipment or restructuring business operations and will be interest free for a period of up to three years.  Loan size from $20,000 - $250,000 https://www.stategrowth.tas.gov.au/__data/assets/pdf_file/0009/227907/TasGov_COVID19_Factsheet_Business_support_Loan_Scheme.pdf
• Provide a new $40 million Small Business Grants Program with $20 million set aside for an emergency grants program of $2500 cash payments
• Small business Hardship Grants of $15,000 if a business needs to cease operation but can show prospects of opening again.
• Provide a Digital Ready for Business Program, to assist businesses take their business online. 
• Other small to medium businesses with an annual payroll of up to $5 million in Australian wages will be able to apply, based on the immediate impact of the virus on their businesses, to not lodge payroll tax returns for the three months March, April and May 2020.  
• Youth employment payroll tax rebate scheme for people aged 24 years and under, for one year from 1 April 2020.  
• $2.1 million for one-off $5,000 grants for businesses that hire an apprentice or trainee, complementing the Federal Government’s apprenticeship package. 
   
• Provide Business Continuity Advice with $750,000 in funding made available for businesses to seek cash flow and continuity advice, including a $50,000 grant to Small Business Council of Tasmania.
• A further $200,000 will be provided to the THA to provide business continuity and cash flow advice, and $200,000 will be provided to Rural Business Tasmania for the extension of its Rural Financial Counselling service. 

• The stimulus package will give eligible businesses $10,000 for upgrades as a part of a new Business Improvement Scheme aimed at helping businesses attract more customers. If a business also wants to contribute its own $10,000, the government will pitch in an additional $10,000 for a total of $20,000.  
• The NT Government has expanded Home Improvement Scheme, where all Territory homeowners will receive $6000 to undertake renovations and improvements to their property by a local business or tradie. People will need to put in $2000 to receive the additional $6000 or alternatively they can put in $1000 and receive $4000.  
• $50 million Small Business Survival Fund to help small businesses survive the physical distancing requirements. 
  • $2,000 for sole traders
  • $5,000 for businesses with 2 to 4 employees (FTEs)
  • $20,000 for businesses with 5 to 19 employees (FTEs)
  • $50,000 for businesses with more than 20 employees (FTEs

Link - https://businessrecovery.nt.gov.au/businesses

https://nt.gov.au/news/2020/economic-stimulus