RSM Australia

Victorian government business survival and adaptation package

Tax Insights

Following the release of its Roadmap to ‘COVID Normal’ on 6 September 2020, the Victorian Government recently announced $3 bn of financial support for Victorian Businesses. 

Business Support Fund Victorian government business survival and adaptation package

The key focus of the Government’s announcement was an additional $822m for the third round of the Government’s “Business Support Fund”.  Over 108,000 businesses have received $1.47 bn in total from the first two rounds.  The third round provides grants of between $10,000 and $20,000 to eligible businesses. 

Whilst the full eligibility criteria have not yet been released, an eligible business is expected to be one which:

  • operates in Victoria;
  • is currently participating in the Commonwealth Government’s JobKeeper program;
  • has employees and is registered with WorkSafe;
  • had an annual payroll of less than $10 million for the year ended 30 June 2020;
  • holds an Australian Business Number;
  • is registered for Goods and Services Tax; and
  • is registered with the responsible Federal or State regulator.

Grants are payable as follows:

Annual Payroll

Grant Amount

Less than $650,000

$10,000

Between $650,000 and $3m

$15,000

Between $3m and $10m

$20,000

 

Full eligibility criteria will be released when applications for Round 3 of the Business Support Fund open on Friday 18 September. In addition, Sole Traders operating from commercial premises or locations are eligible for grants of up to $3,000, resulting in a further $100m in grants.

Payroll Tax 

The Victorian Government has also included further payroll tax deferrals. These are on top of the deferrals announced previously with respect to the year ended 30 June 2020. asset_15.png

The announcements mean that businesses with annual payrolls of up to $10m will be able to defer their payroll tax for the full 2021 financial year, essentially putting $1.7m of cash back into businesses.  However, as this is a deferral (rather than a waiver), the tax will still need to be paid.  Presumably, this will be in a lump sum in July 2021.

Other Tax Measures

Other Victorian tax, duty and levy measures announced include:

  • $41m to bring forward the 50% stamp duty discount for commercial and industrial property in regional Victoria to 1 January 2021;
  • $33m to defer the planned increase in the Landfill Levy for six months;
  • $30m to waive 25% of the current year’s Congestion Levy, with the balance deferred; and
  • $6m to waive Vacant Residential Land Tax for properties that are vacant in 2020.

Hospitality Sector COVID-19

There is no doubt the hospitality sector has been hit hard during this pandemic.  In recognition of this, the Government announced additional specific measures for Victoria’s fledgling hospitality industry. 

These measures included:

  • $251m to support the sector, in the form of grants between $10,000 and $30,000 for licensed venues, based on their capacity and location;
  • $100m in joint funding with the City of Melbourne to support Melbourne on the roadmap to reopening in time for Christmas and the Summer;
  • $87.5m for an ‘Outdoor Eating and Entertainment Package’ to support the sector prepare for ‘COVID Normal’; and
  • $27m to waive liquor licence fees for 2021.

Alpine Businesses

Given Victoria’s staged lockdown, many Victorians were not able to have their traditional winter break at the Victorian ski fields.  In recognition of this and the financial impact this is having on many alpine businesses, the Victorian Government announced grants of up to $20,000 to support such businesses pay service charges to the Alpine Resort Management Boards.

Business Adaptation

In an effort to help businesses more broadly move to ‘COVID Normal’, the State Government announced additional funding, tools and resources to assist with the transition. 

The measures announced include:

  • $20m for a voucher program to assist sole traders and small businesses build their digital capacity;
  • $15.7m to assist Victorian exporters get their products to market and establish new trade channels;
  • $8.5m to expand the ‘Click for Vic’ program, to encourage Victorians to support local business; and
  • $3m to support metropolitan and regional business chambers and trading groups.

For further information

If you require further information, please contact your local RSM adviser to find out more in relation to these measures.


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Authors

Michael Watkins
Senior Manager - Melbourne