Victorian Government announces Business Survival Package worth $3bn
Yesterday (13 September 2020) the Victorian Government announced another round of cash grants, tax relief and cashflow support packages to assist Victorian businesses that have been most affected by COVID-19 restrictions.
The Business Survival Package will provide the following:
- Small and medium sized business ($822 million): The third round of the Business Support Fund will provide up to $20,000 for business with a payroll of up to $10 million.
- Licensed Hospitality Business ($251 million): Grants for licensed pubs, clubs, hotels, bars, restaurants and reception centres of up to $30,000 (based on their venue capacity and location).
- Alpine businesses ($4.3 million): Grants of up to $20,000 to help alpine businesses pay a service charge to Alpine Resort Management Boards.
- Business Chambers & Trader Groups ($3 million): A competitive grants program to support business chambers & trader groups in metropolitan and regional Victoria. Also, other Victorian Government departments/agencies have announced the following:
- Payroll tax deferral for entire 2020-21 year for businesses with payroll wages up to $10 million. (We must stress that this is a deferral, and not a waiver, so it will still need to be paid over time).
- The planned land fill levy rate rise has been deferred for six months to 1 January 2021.
- The 50% stamp duty discount for commercial and industrial property for all of regional Victoria has been brought forward to 1 January 2021.
- The Congestion Levy will be reduced, by waiving 25% of the levy and the outstanding balance being deferred for 2020-21.
- The liquor license fee will be waived for 2020-21.
- The Vacant Residential Land Tax will be waived for properties that were vacant in 2020.
While full details of each announcement has not been released yet, we have provided the information available as at 14 September 2020 under each of the ten headings below. Further updates will be provided as more information become available.
1) Third round of the Business Support Fund
What support is available?
It is expected that approximately 75,000 eligible businesses with payrolls up to $10 million will receive grants of $10,000, $15,000 or $20,000 (depending on the size of the businesses' annual turnover).
To be eligible for a grant from this program, applicants must:
- operate a business located within Victoria; and
- participate in the Commonwealth Government's JobKeeper Payment scheme; and
- employ people and be registered with WorkSafe; and
- have had an annual payroll of less than $10 million in 2019-20; and
- be registered for Goods and Services Tax (GST); and
- hold an Australian Business Number (ABN); and
- be registered with the responsible Federal or State regulator.
An eligible business will receive:
- $10,000 if its annual payroll is less than $650,000;
- $15,000 if its annual payroll is between $650,000 and $3 million; or
- $20,000 if its payroll is between $3 million and $10 million.
We understand that a full list of the eligibility criteria for this grant package will be published when applications open.
How to apply?
Applications should open soon, and be made via the Business Victoria website – click here .
2) Grants for licensed pubs, clubs, hotels, bars, restaurants and reception centres up to $30,000
Grants of between $10,000 and $30,000 will be available for eligible licenced venues, such as bars, restaurants, pubs, clubs, hotels and reception centres.
This program will help to build on the previously announced Hospitality Business Grant program which was offering one-off grants up to $25,000. We released a Tax Alert on 24 August 2020 detailing the three distinct grant assistance programs for Victorian hospitality businesses impacted by COVID-19 restrictions, and how to apply for these grants – click here.
This new grant funding program will be based on venue capacity and location, however no specific details have been made available at this time.
3) Grants for Alpine businesses of up to $20,000
Victorian ski fields have not been able to open for their usual winter season, and so this relief package to provide grants of up to $20,000 to help cover resort fees. No specific details have been made available at this time.
4) Grants for Business Chambers & Trader Groups of up to $20,000
The Government will also partner with local business groups and chambers of commerce, with grants of up to $20,000 so they can help their members adapt and assist their recovery moving into a COVID-Normal world. No specific details have been made available at this time.
5) Payroll Tax deferral for entire 2021-2021 year
Reminder of previous Payroll Tax relief measures
We note that businesses with annual payroll wages up to $3 million have already had their payroll tax for the 2019-20 year waived. Those eligible businesses must continue to lodge returns but do not need to make further payments for the 2019-20 year. Those businesses could also defer paying payroll tax for the first quarter of the 2020-21 year.
Also, we note that eligible businesses with payroll wages up to $10 million could defer payment of their payroll tax liability for the first half of the 2020-21 year.
Latest announcement for Payroll Tax deferred for entire 2020-21 financial year
Businesses with payroll wages of up to $10 million will now have their payroll tax deferred for the entire 2020-21 year.
We must stress that this is a deferral, and not a waiver, and eligible businesses will be required to pay their 2020-21 payroll tax liabilities in four quarterly instalments during in the 2021-22 income year:
- Liabilities for July, August and September 2020 will be due on 7 September 2021.
- Liabilities for October, November and December 2020 will be due on 7 December 2021.
- Liabilities for January, February and March 2021 will be due on 7 March 2022.
- Liabilities for April, May and June 2021 will be due on 7 June 2022.
Membership of a payroll tax group is not considered in determining whether or not the member's Victorian taxable wages for the 2019-20 year exceeded the $10 million threshold.
To be eligible for this deferral measure, an employer must lodge their:
- 2019-20 annual reconciliation return; and
- monthly payroll tax returns for the months of July 2020 through to June 2021.
6) Landfill levy rate rises deferred
The Victorian Government will defer the planned adjustments to landfill levy rates for six months while local government, households and businesses are dealing with the impact of COVID-19.
The first adjustment will be delayed until 1 January 2021.
7) Duty concession for commercial or industrial properties in regional Victoria
The 50% stamp duty discount for commercial and industrial property across all of regional Victoria will be brought forward to 1 January 2021.
There is no limit to the number of times a person can claim this relief. To qualify, the dutiable property must be used solely or primarily for a qualifying commercial or industrial land use for a continuous period of at least 12 months, commencing in the two years following the date of transfer.
The status as commercial or industrial property is determined by reference to the land uses set out in the Australian Valuation Property Classification Codes.
8) 25% Waiver of 2020 Congestion Levy
The Victorian Government has announced a 25% waiver of 2020 congestion levy liabilities, with the due date for paying the balance of 2020 congestion levy liabilities extended until 31 March 2021.
9) Liquor License Fees waived for 2021
Just as renewable liquor licence fees were waived for 2020, this relief has been extended to also waive liquor license fees for 2021.
We understand that this relief will be structured by allowing eligible businesses to simply not pay their 2021 renewal fees, instead of using a refund system.
10) Full waiver of 2021 Vacant Residential Land Tax
Travel and property inspections restrictions imposed in the Melbourne metropolitan area have caused many properties, that would otherwise be occupied, to currently be vacant.
A full waiver of 2021 Vacant Residential Land Tax (VRLT) liabilities has been announced, and this should assist many residential property owners in Melbourne's inner and middle suburbs, that have had their properties vacant for more than six months in 2020.
We understand that further information about this relief measure will be available shortly via the coronavirus page at the Victorian SRO website – click here.
Finally we note that some businesses may be eligible for a number of different support measures, and thus it is very important to carefully consider the eligibility requirements of each relief package.
Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.