Government announce more stimulus for small business

The Federal Government have announced a second round of stimulus measures designed to keep small businesses afloat as the Coronavirus crisis forces ever-greater restrictions on their ability to carry on day-to-day operations.

The Government’s SME Guarantee Scheme will guarantee of 50 per cent to lenders to support new short-term unsecured loans to SMEs.

The package also introduces six month deferment of all loan repayments attached to a small business financially affected by COVID-19.

And the Small & Medium Business Cash Boost provides a pool of almost $40 billion from which cash payments of up to $100,000 will be available to SMEs, up from a maximum payment of $20,000 per business in the initial stimulus package.

Sole traders who experience a significant loss of income will be eligible for the Coronavirus supplement and jobseeker payment which will assist them to continue working for the next six months.

Businesses with a turnover of less than $500 million can now deduct an extra 50 per cent of asset costs in depreciation. And small businesses with fewer than 20 employees will get up to $7000 each quarter for apprentices as a wage subsidy, equal to half the apprentice or trainee’s wage from 1 January to 30 September.

Welcome relief

The measures have been welcomed as a step in the right direction towards preventing the potential implosion of the small-business sector in the face of this unprecedented crisis.

“Ultimately, this package gives small and family businesses some breathing space until circumstances return to normal, which

will play a critical role in their survival and the ability for our economy to bounce back,” Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, said. Alongside the measures for small business, Carnell also applauded the assistance for individual members of the community who are struggling to meet their financial obligations through the change in regulations that will allow them to access up to $10,000 of their superannuation this financial year and an extra $10,000 the year after without paying tax.

Business Council Chief Executive Jennifer Westacott said,“We applaud the government’s measures to double income assistance, making it more flexible. Waiving the rules and waiting periods for payments means people who need assistance now can access payments quickly.

“Crucially, giving Australians easier hardship access to their own money in superannuation accounts is a welcome step to help provide additional help. The new Coronavirus SME Guarantee Scheme on top of already announced measures to access affordable credit will provide further certainty to businesses.”

This latest package probably won’t be the last, with the Prime Minister already flagging a third round.

“We will be supercharging our safety net, we’ll be supporting the most vulnerable to the impacts of the crisis, those who will feel those first blows,” Scott Morrison told reporters yesterday.