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The Government’s latest COVID-19 initiatives explained

By Michael Walsh, CEO Walshs

The Federal Treasurer has announced a significant deficit of $85.8 billion for 2019-2020 and an estimated $184.5 billion deficit for 2020-2021, so Australians (especially businesses) are facing some challenging headwinds over the next few years.

We are here to assist with cashflow forecasting and budgeting, applying for loans and grants, managing tax obligations and liaising with the ATO regarding tax debts. Just email or call us for assistance.

New Government incentives 

  • Extension of temporary early access to superannuation:

Individuals who are still financially impacted by the COVID-19 pandemic will have more time to apply for the early release of up to $10,000 of their superannuation, with the early access application for the 2020-2021 period now extended from 24 September, 2020 to 31 December, 2020.

  • Extension of the COVID-19 SME Guarantee Loan Scheme:

The government is extending the scheme to loans written until 30 June, 2021 (initially available to 30 September 2020) and making amendments to the scheme to ensure that the loans available suit the evolving needs of SMEs.

The loan scheme provides SMEs access to finance  to help them through the impact of the virus. The Federal Government is guaranteeing 50% of new loans issued by eligible lender and asset security by the borrower is limited.

The Government-backed guarantee loans are available on the following terms:

– Available to SMES (including sole traders) with a turnover of up to $50 million.

– Maximum loan per borrower as from 1 October, 2020, up to $1.0 million.

– Applications prior up to 30 September, 2020, loan amount limited to $250,000.

– Loans can be used for working capital, support investment in a period pf economic recovery.

– Loans from 1 October, 2020, can be up to five years. Loan applications up to 30 September, 2020, are for three years. In each case a six-month repayment holiday will be at the discretion of the lender.

– The Government is encouraging lenders to provide facilities to SMEs that only have to be drawn if needed by the SME. This will mean that the SME would only incur interest on the amount drawn down.

  • JobKeeper Payment Scheme:

JobKeeper 2 will commence on 24 September, 2020, with the ATO to announce more details on the implementation over the next few weeks. We will keep clients updated.

If you want further information on the Government’s latest COVID-19 initiatives, contact Walshs on 07 32215677 or email your usual team member.