Yesterday 13 July 2021, the New South Wales Government (NSW Government) announced a myriad of relief measures for residents, in the midst of the current COVID-19 crisis in Greater Sydney.
The measures are primarily focused on bolstering businesses with a view to keeping them operational, rather than concentrating on underlying employees (as we saw with JobKeeper). The NSW Government has expressed that the aim of these measures is to prop up business on the premise that those businesses will not be forced to shed their employees in the interim (i.e. it is expected that the measures will ultimately benefit employees by way of allowing them to retain their positions).
Some key takeaways from the announcements are:
Boost for businesses
- Expansion of the previously announced business grants program, with grants of between $7,500 and $15,000 now available for small businesses, sole traders and not-for-profits:
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(a) with annual wages of up to $10 million; and
(b) who have been affected by the first three weeks of Sydney's lockdown (which is demonstrated by comparing revenue for the same period in July 2019);
- Similar expansion of the business grants program for businesses in the hospitality and tourism sector;
- A new grants program for micro businesses (defined as having a turnover of between $30,000 and $75,000 annually) which experience a decline in turnover of 30% or more. This measure will see eligible businesses entitled to payments of up to $1,500 per fortnight of lockdown (although it is unclear whether, if lockdown ends part way through a particular fortnight, the businesses would remain eligible for the part of that fortnight where a lockdown was in place);
- 25% waiver of payroll tax for businesses with Australian wages between $1.2 million and $10million, who suffer a decline in turnover of 30% or more (as well as deferrals and payment plans where needed); and
- Deferral of gaming tax assessments for clubs until 21 December 2021 and hotels until 21 January 2022.
Relief for landlords and tenants
- An eviction moratorium for residential tenants who have suffered loss of income of at least 25% due to COVID-19;
- Landlords will be unable to recover security bonds held on behalf of retail and commercial tenants and will be unable to enforce lockouts or evictions prior to mediation; and
- Land tax grants of up to $1,500 are available for residential landlords who reduce rent and are unable to pay land tax. In addition, up to 100% land tax relief in relation to a landlord's 2021 land tax liability is available for residential, retail and commercial landlords who reduce rent for financially distressed tenants (there are no parameters on what constitutes a 'financially stressed tenant' in the announcement, but we anticipate this will be tied to loss of income from COVID-19 or in the case or businesses, a reduction in turnover).
- Additionally, funding will also be available for other heavily impacted areas such as the performing arts and accommodation sectors. Funding has also been committed to supporting those at risk of or experiencing homelessness, and for mental health support services.
What the measures mean to you
Obviously, the announced measures have led to a collective sigh of relief for many businesses operating not just in the heart of Sydney, but in regional areas (for example, all of the coastal and regional accommodation businesses that were expecting a flock of Sydney-siders for the school holidays!).
However, more detail is needed to really understand if many businesses will be eligible for relief under the recently announced measures. For example, in relation to the payroll tax waiver measures for businesses, we anticipate proving a decline in turnover of 30% or more may be difficult for many businesses who operate both inside and outside of Sydney regions – and there is no commentary to suggest that the decline is measured only in respect of income derived via activities in affected by Public Health Orders.
Further, we do not yet have any information on whether businesses who commenced after July 2019 would be eligible for the business grants, even where similarly impacted by the current lockdown.
What about employees?
As mentioned above, most of the measures announced are aimed at a business level, with an expectation that they will ultimately benefit employees of those businesses. However, this does not assist in circumstances where a business has been impacted by lockdowns and restrictions, but is nevertheless not eligible for the relief measures. It also does not assist those workers in casual positions who do not earn a wage when their employers have been forced to close.
As such, it is pleasing to hear that the NSW Government has also committed to funding half of a $2.1 billion new business and employee support program, which will be rolled out in conjunction with the Federal Government. While there are limited details on this program available, it is expected to loosely resemble the previous JobKeeper initiative, assisting with cash flow to business and employees. Expect more on this to dominate the headlines in the coming days and weeks.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
