As the hospitality industry confronts one of its toughest challenges in the form of the coronavirus crisis, we take an preliminary look at the assistance that has been extended from state and federal levels of government.
While some initial measures are specifically targeted to the sector, others carry broader eligibility requirements.
We have identified and briefly summarised the following 8 potential support measures and included helpful links:
- Jobkeeper
- Employer staff retention
- Deferral of bank loan and interest payments
- Acclerated depreciation
- Bank business loans supported by Federal government
- Tenant landlord code of conduct / No evictions
- ATO
- State and Territory Government support
IMPORTANT: Below is an incomplete list of some of the potential steps Publicans, Hoteliers, Hospitality owners and operators can explore to support their businesses impacted by COVID-19. As everyones situation is different we strongly recommend you seek your own independent financial, tax and legal advice as to your eligibility and current status of the proposed assistance packages.
What is it?
On March 30, the federal government announced businesses impacted by the Coronavirus will be able to access a subsidy from the Government to continue paying their employees.
Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.
Eligibility?
The Jobkeeper payment is eligible to businesses with a turnover of less than $1 billion who have had their turnover reduced by more than 30 per cent relative to a comparable period a year ago, so most hospitality businesses should qualify.
How do you apply?
While the legislation is yet to be fully passed by parliament, employers can register their interest in applying for the JobKeeper Payment via ato.gov.au.
Helpful links
Hotels welcome ‘Jobkeeper’ package: AHA
Government’s $130 billion JobKeeper package welcomed
Australian Small Business and Family Enterprise Ombudsman
Australian Hotels Association
Real Estate Institute of Australia
What is it?
As part of one its initial response to the coronavirus crisis, the government announced small businesses with a turnover under $50 million will receive a tax-free cash payment of from $20,000 up to $100,000 to help them retain staff and continue operating.
Eligible entities will receive an additional payment equal to the total of all of the ‘boosting cash flow for employers’ payments received.
Eligibilty?
Small and medium business entities with aggregated annual turnover of less than $50 million and that employ workers are eligible for the payment.
How do you apply?
Applications can be made through ato.gov.au.
Helpful links
Tourism Accommodation Australia
What is it?
On March 30, the Australian Banking Association announced businesses with total business loan facilities of up to $10 million (up from the $3 million small business threshold) will now be able to defer repayments for loans attached to their business for six months.
During this period banks have also agreed to not enforce business loans for non-financial breaches of the loan contract (such as changes in valuations).
Eligibility?
Commercial landlords across the hospitality industry are invited to apply, provided they commit to not terminating their lease or evicting current tenants for rent arrears as a result of COVID19 for for the period of the interest capitalisation
How do you apply?
Applicants must inform their bank that business is affected by COVID-19 and they were current in terms of existing facilities 90 days prior to applying.
Helpful links
Property Council of Australia
Go to Australian Banking Association to learn more about the expanded business relief package.
What is it?
As part of its first round of stimulus measures, the federal government announced businesses would be able to deduct an additional 50 per cent of an asset cost in the year of purchase from 12 March 2020 until 30 June 2021.
Eligibility?
Businesses with a turnover of less than $500 million that are purchasing new depreciable assets are eligible.
How do you apply?
Depreciation claims can be made as part of a business tax return. As of yet, no other announcements have been made about how to make these claims earlier.
Helpful Links
The Australian Treasury website
Commercial property: frequently asked depreciation questions
What is it?
The Coronavirus SME Guarantee Scheme will "provide a guarantee of 50 per cent to small and medium enterprise (SME) lenders for new unsecured loans to be used for working capital. This will enhance these lenders’ willingness and ability to provide credit, which will result in SMEs being able to access additional funding to help support them through the upcoming months. SMEs with a turnover of up to $50 million will be eligible to receive these loans." (Source: www.business.gov.au)
Eligibility?
- Maximum total size of loans of $250,000 per borrower.
- The loans will be up to 3 years, with an initial 6 month repayment holiday.
- The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.
How do you apply?
To apply for the Coronavirus SME Guarantee Scheme you should approach your financial institution for more information.
Helpful Links
www.business.gov.au.
What is it?
At the time of writing, an updated policy for commercial leases had not been finalised, with an industry code of practice for tenancies still being worked on.
Speaking on Friday, Prime Minister Scott Morrison made it clear he wanted the industry to complete their code to become mandatory incorporating state and territories. Key points included:
An industry code of practice for commercial tenancies is being worked on over the next few days by the various industry groups.
- If as a business you qualify for the Job Keeper support for your employees, the intention is that whatever reduction you have received in turnover, that will be the equivalent to your reduction in rent.
- If you negotiate a rent waiver for six months, then your lease should be extended by 6 months
- Banks are not party to the arrangements but are expected to be supportive
- States are looking to see what support they can give in waiving rates and fees
Eligibilty?
"For landlords and tenants that sign up to the code of conduct, States and Territories have agreed to look at providing the equivalent of at least a three month land tax waiver and three month land tax deferral on application for eligible landowners, with jurisdictions to continue to monitor the situation. Landlords must pass on the benefits of such moves to the tenants. In cases where parties have signed to the code of conduct, the ability for tenants to terminate leases as mentioned in the National Cabinet Statement on 29 March 2020 will not apply. Mediation will be provided as needed through existing State and Territory mechanisms.
The proposed code of conduct will be discussed at the next meeting of the National Cabinet on Tuesday 7 April." (Source: Prime Minsiter of Australia media statemeon on 3 April 2020)
How do you apply?
Commercial tenants, landlords and financial institutions are encouraged to talk about short term agreements.
Helpful links
Code of conduct is the key to a clear path for commercial tenants and landlords
A hold on evictions for renters - www.business.gov.au
7. ATO
Information about ATO measures and tailored support during COVID-19.
Visit ATO Community, available 24/7 with questions, answers and regular updates.
8. State-Territory Government Based Support
This is not a complete summary and may have changed soon after publishing, however we have attempted to summarise with the best known information at that time and links helpful sites. We plan to keep updating this page on a regular basis.
We strongly recommend you seek personal professional financial, tax and legal advice particular to that state and or territories that you operate within.
Western Australia
The Western Australian Government has announced a series of new measures designed to support small hospitality businesses including:
- A payroll tax waiver for a four-month period between March and June 2020 for small-to-medium sized businesses with Australia-wide annual wages of less than $7.5 million in 2019-20.
- A one-off $2,500 credit for small Synergy and Horizon Power customers that consume less than 50 megawatt hours per annum.
- A waiver or refund of liquor licence renewal fees for 2020.
- The ability for affected businesses to apply for an interest-free payment arrangement and for late payment penalties to be waived for payroll tax, transfer duty, landholder duty, vehicle licence duty or land tax.
- The reassurance that small businesses facing financial difficulty due to COVID-19 won’t face power or water disconnections due to late payments.
AHA(WA) CEO Bradley Woods has said while the measures would go a long way to supporting the industry, it was "highly likely" more assistance would be needed.
Click here for more information.
COVID-19 coronavirus: Business and industry advice - WA Government
Australian Hotels Association welcomes hospitality 'lifeline' from WA Government
New South Wales
New South Wales has so far been the hardest hit of the states in terms of coronavirus cases.
In response to the crisis, the NSW Government has announced the following support for small businesses:
- Tax-free threshold increase from $900,000 to $1 million.
- Deferral of payroll tax for business with payrolls over $10 million for 6 months (up to $4 billion deferred).
- An additional 3-month deferral for businesses with payrolls of $10 million or less who received a 3-month waiver on payroll tax in the first package.
- Deferral of gaming tax for clubs, pubs and hotels, and lotteries tax for 6 months, conditional on these funds being used to retain staff. This improves liquidity and helps these businesses stay afloat.
- Deferral of the parking space levy for 6 months.
- Deferral of rents for 6 months for commercial tenants with less than 20 employees in all Government-owned properties.
Click here for more information.
COVID-19 help for small businesses - NSW Government
The Real Estate Institute of NSW request the government waive land tax during the COVID-19 crisis.
Victoria
In order to cushion the economic impact of COVID-19, the Victorian Government has announced $500 million Business Support Fund willsupport the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail.
Other measures include:
- Land tax defferal- Landowners that have at least one nonresidential property and total taxable landholdBusiness and industry supportings below $1 million have the option of deferring their 2020 land tax payment until after31 December 2020.
- Waiving liquor licence fees
- Fast tracking outstanding supplier invoices
Click here to find out more.
Coronavirus business support - Victorian Government
Victorian Small Business Commission’s advice for small business owners struggling to pay rent
Queensland
The Queensland Government announced it would be partnering with Chamber of Commerce and Industry Queensland (CCIQ) to deliver widespread assistance throughout the state.
- Businesses which pay $6.5 million or less in Australian taxable wages may be eligible for a refund of your payroll tax for 2 months (November and December 2019) or a payroll tax holiday (i.e. no payroll tax to be paid) for 3 months (January to March 2020). There is also the option to defer payroll tax for the 2020 calendar year.
- A loan facility of at least $500 million, interest free for the first 12 months, is being created to support Queensland businesses impacted by COVID-19 to retain employees and maintain operations.
- Any business consuming less than 100,000 kilowatt hours will receive a $500 rebate on their electricity bill, which will be automatically applied on business electricity bills.
Click here to find out more.
Business and industry support - Queensland Government
Payroll tax refund delivers $50 million to Queensland businesses
$50 million in tax relief for Queensland pubs and clubs
South Australia
The South Australian Government has $1 billion worth of stimulus to support the economy, including the establishment of a $300 million Business and Jobs Support Fund.
Other initiatives include:
- A six month payroll tax waiver for business groups with annual Australian wages of up to $4 million will receive. Eligible business groups will not be required to pay any payroll tax in the months of April to September 2020.
- From July, businesses and individuals paying land tax quarterly in 2019-20 will be able to defer payment of their remaining 2019-20 land tax payments for six months.
- A waiver of annual liquor licencing fees for 2020-21 for On Premises, Residential, Restaurant & Catering, Club, Liquor Production & Sales, and Small Venue.
Click here to find out more.
COVID-19 business information and support - SA Government
Tasmania
Support on offer for Tasmanian pubs that may be affected by COVID-19 includes:
- One off grants of up to $750 are available through the Business Continuity Grant.
- Loans from $20,000 up to $250,000 to assist eligible businesses for the purpose of supporting business continuity, viability and sustainability during the Coronavirus period.
- Grants of $2 500 are available through the Department of State Growth as one off emergency support payments.
Click here to find out more.
COVID-19 Business Support, Grants and Loans - Tasmanian Government
ACT
The ACT Government is delivering a $137 million economic survival package to support the ACT community through the public health emergency caused by the COVID-19 pandemic.
Support on offer by the ACT government inlcudes:
- Payroll tax deferral
- Commercial general rates
- Commercial tenancy relief
Click here to find out more.
Northern Territory
The Northern Territory Government has invested nearly $120 million in response to the deep economic impacts of the Coronavirus crisis through the Jobs Rescue & Recovery Plan, Small Business Survival Fund and Worker and Wellbeing Plan, in addition to the already announced $2million Immediate Tourism Resilience Plan.
NT Government is also supporting Territory workers to connect with local businesses and find new employment through the new online portal Territory Jobs Hub.
Click here to find our more.
Helpful industry links
Australian Hotels Association - COVID 19 Resources
Australian Taxation Office - COVID 19 Information
Related Reading
REIA reiterates Minister's words: Moratorium on rents is not a free ride
Workers to be kept on the payroll keeps economy ticking over
Tenants and stakeholders get clear message from REIA president
John McGrath – How real estate operates through COVID-19
Navigating rental arrangements under a pandemic
