Government support for Victorian businesses

The additional support package which will expand on the existing Victorian Government’s $534 million Business Support Package includes:

• a new one-off grant of $5,000 for eligible businesses;
• extended and expanded payroll tax deferrals for the first half of the 2020-21 financial year;
• a $30m night-time economy fund to support the hardest hit businesses in hospitality;
• a $20m CBD Business Support Fund especially for small businesses in the Melbourne CBD; and
• $40m for regional tourism businesses to cover the cost of refunds and marketing.

Applications for the program close on 19 August 2020.

With most of Victoria officially in lockdown in an attempt to stop the second wave of COVID-19, the impact on many businesses based across metropolitan Melbourne and the Mitchell Shire will be significant over the next 6 weeks and beyond. As a way to assist businesses that have only recently started to reopen, the Victorian government is providing a large financial support package.

It is estimated that over 80,000 businesses will be eligible for a new one-off grant of $5,000. For a business to be eligible, it must meet all of the following criteria:

• operate a business located in metropolitan Melbourne or Mitchell Shire
• be a participant in the Commonwealth Government’s JobKeeper Payment scheme
• employ people
• be registered with WorkSafe on 30 June 2020
• have an annual payroll of less than $3 million in 2019-20 on an ungrouped basis
• be registered for Goods and Services Tax (GST) as at 30 June 2020
• hold an Australian Business Number (ABN) and have held that ABN at 30 June 2020
• be registered with the responsible Federal or State regulator.

Many businesses will also benefit from an extended and expanded payroll tax deferral. Eligible businesses with payrolls of up to $10m can defer their liabilities for the first half of the 2020-21 financial year. Whilst no further details have been provided, this payroll tax deferral is likely to be different to the payroll tax waiver implemented by the government during the 2019-20 financial year. This means that businesses that choose this option will merely be deferring their liabilities until a later date.

The government has also launched a $30m dedicated fund for the state’s night-time economy to support the hardest hit businesses in hospitality. In addition, a $20m CBD Business Support Fund especially for small businesses in the Melbourne CBD that are faced with a large and sustained shock to their trading environment. Both of these funds appear to be ongoing programs to help businesses over the longer term rather than the immediate shock from lockdown.

Of course, the lockdown doesn’t just affect businesses in the metropolitan areas, regional tourism businesses is also expected to be heavily affected by the closing of borders and Victorians unable to travel locally. Hence, the financial support package also includes $40m for regional tourism businesses to cover the cost of refunds, as well as marketing campaigns to boost region to region visitation. Eligible businesses will be able to claim up to $225 per night for up to 5 nights for each and every room cancelled due to the lockdown, provided they refund the bookings in full.

To be eligible, accommodation providers must have an ABN and be in one of the 11 Victorian Regional Tourism Regions (48 regional and rural councils plus a number of interface councils in the Yarra Valley and Mornington Peninsula; Victoria’s six ski resorts; Gabo, French, Lady Julia Percy Islands). Providers will also have to be “bookable” to the general public and advertised via an online booking platform, accommodation agencies, a registered real estate agent or a publicly available location subject to certain conditions.

If your business is in lockdown and would like to access the extra financial support provided by the government in these packages, contact your usual Mazars advisor or alternatively, one of our Tax experts.

Published:  23/7/2020

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