The NSW Government’s response to COVID-19
Since the outbreak of COVID-19, the Australian government has introduced a range of measures at both the federal and state/territory levels to financially support individuals and businesses.
In this article, we summarise the current measures introduced by the NSW Government to provide financial support to businesses and individuals in response to the pandemic. As this situation continues to evolve, we expect the NSW Government will introduce further measures to address financial distress by those negatively affected by the pandemic, and to stimulate the economy as we enter the recovery phase. We will endeavor to provide further updates as such measures are introduced.
For information regarding some of the measures introduced by the Federal Government, please visit our COVID-19 Resource Centre.
Financial stimulus package
The NSW Government has announced a financial stimulus package that includes various initiatives for tax deferrals; rent and parking; license, registration and permit fees; and support grants for small businesses.
The changes include:
- increasing the tax-free threshold from $900,000 to $1 million;
- allowing all businesses to have the option to defer their payroll tax until October 2020;
- for payroll tax customers whose total grouped Australian wages for the 2019/20 financial year are $10 million or less, their annual tax liability will be reduced by 25% when they lodge their annual reconciliation;
- deferring gaming machine tax for clubs, pubs and hotels for six months to 1 September 2020 (conditional on these funds being used to retain staff);
- deferring payments on lotteries and Keno to 30 September 2020; and
- deferring parking space levy payments from the end of March for 6 months to 30 September 2020.
The NSW Government has waived fees on a range of licences, registrations and permits (for example liquor licences, certain tradesperson certificates, permits for paintball venues and licences and permits relevant to tattoo artists) for 12 months on new applications and renewals lodged by eligible businesses and individuals. The start date for the 12-month period depends upon the relevant licence, registration and permit fee. Visit the Financial Stimulus Packages web page to see the relevant licences, registrations and permits.
Small business support grant
A small business support grant of up to $10,000 is available to eligible small businesses that have been highly impacted by COVID-19. The NSW Government has recognised “highly impacted” industries as retail trade; accommodation and food service; rental, hiring and real estate services; administrative and support services; and arts and recreation services. In addition to being highly impacted by COVID-19, these business will need to satisfy each of the following to be eligible for the support grant:
- have between 1–19 employees and a turnover of more than $75,000;
- a payroll below the NSW Government 2019–2020 payroll tax threshold;
- have an ABN as at 1 March 2020, be based in NSW and employ staff as at 1 March 2020;
- use the funding for unavoidable business costs such as utilities, overheads, legal costs and financial advice; and
- provide appropriate documentation upon application.
Planning System Acceleration Program
The NSW Government has announced a fast-tracked assessment process in its Planning System Acceleration Program, as a measure to keep people in jobs and keep the construction industry moving.
So far, 24 projects have been identified for the expedited assessment process.
The criteria to identify and progress projects eligible to be fast tracked are available here.
In summary, the project should:
- create jobs during construction and beyond;
- offering a public benefit (for example affordable housing or a significant public space);
- be able to commence quickly, for example for development approvals, can the project commence within 6 months?; and for planning proposals, can the project proceed to development approval within 6 months?
NSW Government support: Utility bill relief
Additional financial support is now available directly through Service NSW and the NSW Department of Planning, Industry and Environment to households that are unable to pay their electricity bills as a result of COVID-19.
Residential energy customers can apply for a voucher through the Energy Accounts Payment Assistance (EAPA) Scheme, and will be called for an assessment so that it is not necessary to leave the home. The EAPA assessment threshold has been lifted so that people can receive up to $400 per assessment twice per year (previously $300).
The government has flagged utility bills as being uniquely impacted due to customers having unexpected changes to income teamed with increases in usage as a result of spending additional time at home.
Further details are available here.
The majority of economic support available for individuals during COVID-19 are initiatives of the Federal Government.
This support includes income support payments, a Coronavirus supplement payment, payments to support households, and early access to superannuation for a six-month period. Each of these are summarised in more detail under the subheadings below.
Income support payments
Those eligible for income support payments include those receiving JobSeeker Payment, Youth Allowance, Parenting Payment, Austudy, ABSTUDY, Farm Household Allowance and Special Benefit Recipients. Since 25 March 2020, there has been increased access to certain income support payments as a result of the Federal Government relaxing requirements by temporarily waiving asset testing and waiving waiting periods.
Coronavirus supplement payment
From 27 April 2020 the Coronavirus supplement payment of $550 per fortnight is available to the income support payment categories listed in the “Income support payments” heading above. Further details of these measures are available in the Federal Government’s Fact Sheet for Income Support for Individuals.
Those that are not eligible to receive the Coronavirus supplement payment, but who receive another payment or hold a concession card, will be eligible for a $750 payment on 10 July 2020 as part of a second installment to support households (the period to claim the first payment concluded on 13 April 2020). See the Federal Government’s Fact Sheet for Payments to Support Households for a list of payments other than those listed above that are eligible for the second $750 installment.
Early access to superannuation
Before 1 July 2020, eligible individuals can apply to access up to $10,000 of their superannuation, and up to a further $10,000 between 1 July 2020 and 24 September 2020. Eligible individuals include those that satisfy one of the following criteria:
- you are unemployed; or
- you are eligible to receive a JobSeeker Payment, youth allowance for jobseekers, parenting payment, special benefit or farm household allowance; or
- on or after 1 January 2020
- you were made redundant; or
- your working hours were reduced by 20% or more; or
- if you are a sole trader – your business was suspended or there was a reduction in your turnover of 20% or more.
For information on how to apply for early access to your superannuation, see the Federal Government’s Fact Sheet for Early Access to Superannuation.
Though this payment is technically made to businesses, we include it in this section as it must be used by eligible businesses to pay to their employees that are “stood down” as a result of COVID-19.
To enable small businesses to keep paying their employees, the Federal Government has announced the JobKeeper subsidy available from 30 March 2020 for up to six months. Eligible businesses will receive the $1500 per fortnight payment for each eligible worker (employed on 1 March 2020 and continues to work for the business) in the first week of May to pass on to eligible employees.
To boost cash flow for employers, the Federal Government is providing tax-free payments between $20,000 and $100,000 to eligible small and medium-sized businesses and not-for-profits with aggregated annual turnovers under $50 million. The Federal Government has also announced they will guarantee 50% of the value of loans up to $250,000 of eligible businesses and that there will be a six-month repayment-free period.
To reduce the financial stress on commercial tenancies during COVID-19, the Federal Government introduced a Mandatory Code of Conduct for Australian Small and Medium-sized Enterprises Commercial Tenancies that will be implemented by the states and territories. See our article for further information on the application of the code, in particular what the code means for landlords and tenants of commercial premises.
In relation to residential tenancies, the NSW Government enacted the Residential Tenancies Amendment (COVID-19) Regulation 2020 that commenced on 15 April 2020. The key change is an interim 60-day moratorium on residential tenancy evictions due to rental arrears where tenants are financially disadvantaged by COVID-19.
Land tax deferral
In addition, the NSW Government has announced a reduction in land tax by up to 25% for those who have a tenant that is suffering financial distress due to COVID-19 or for those who have reduced the rent of the affected tenant by at least as much as the tax reduction. Financial distress for commercial tenants is a 30% drop in revenue and 25% drop in household income for residential tenants.
The above measures taken by Federal and State Governments may be subject to change as the situation in relation to COVID-19 continues to evolve in Australia and around the world.