A second stage of Federal Government support has been announced to “keep businesses in business and to keep workers in jobs”.
Prime Minister Scott Morrison said the government was acting to cushion the blow to businesses and the workforce from coronavirus to get them through to the other side of the crisis.
“We want to help businesses keep going as best they can or to pause instead of falling apart. We want to ensure that when this crisis has passed Australia can bounce back,” the Prime Minister said.
“There is a lot of pain coming but we’re going to cushion the blow as best we can.
“In the event that someone does regrettably lose their job because of the coronavirus it’s very important that business give their workers the confidence that this is just temporary. And that when they reopen their doors and get back to business that they will want to get them back on the payroll as soon as possible.”
Under the new measures eligible businesses (those with an annual turnover of up to $50 million) and eligible not-for-profit charities:
• will be granted wage subsidies of up to $100,000 each to keep staff on.
• will be offered access to a further $20 billion in government guaranteed unsecured loans capped at $250,000 each.
The way this second phase of support will work:
• eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 100 percent of the amount withheld, up to a maximum payment of $100,000.
• eligible businesses that pay salary and wages will receive a minimum payment of $20,000, even if they are not required to withhold tax.
• the Federal Government will give lenders a guarantee on loans to small businesses so they can keep in business.
• Loans will be used for working capital purposes and will be unsecured, for loans granted within six months from April 1, 2020.
• The scheme will apply to new or existing customers of banks and non-bank lenders.
• Lenders will not be charged a fee for accessing the scheme. It will be repayment-free for six months. The maximum loan will be $250,000 for a term up to three years.
• It will not apply to refinancing of customers who already have existing loans that will benefit from the ABA announcement that loan repayments, on application to the lender, will be frozen for six months.