The Australian federal government has announced a further $130b economic stimulus package in response to Covid-19, bringing the total federal stimulus to $319b (or around $24,700 per working Australian). To put this staggering sum into context, the total stimulus provided by the government during the Global Financial Crisis was just $52b or $4,800 per working Australian. Which goes to show you just how deeply in the poop we now find ourselves.
Unlike the first two packages, which provided a variety of measures targeted at different cohorts, this one has been expressly designed to assist businesses of all sizes to retain their employees. According to the Treasury Department, “This assistance will help businesses keep people in their jobs and re-start when the crisis is over. For employees, this means they can keep their job and earn an income – even if their hours have been cut.”
What follows is a summary of the way this stimulus package will benefit architecture practices over coming months.
Federal jobkeeper payment
- You are eligible for this support if your practice has a turnover of less than $1b, and your turnover has been reduced by at least 30% relative to a comparable period a year ago.
I’m not going to even bother explaining the eligibility criteria for architecture practices with turnover greater than $1b, but the “relative to a comparable period” bit deserves some unpacking:
- Keep in mind that the relevant measure is turnover not profit i.e. total revenue before salaries, expenses and taxes.
- Turnover is to be measured over a period of at least one month.
- A comparable period means “a typical month in 2019”. Of course, running an architecture business is like riding a rollercoaster so working out how to define a typical month might require you to have a chat with your accountant.
- You will receive $1,500 per employee per fortnight.
- Employees need to have been on your books on the 1st of March and continue to be employed by you.
- This includes all full time, part time, long term casual and stood down employees.
- Long term casual employees need to have been employed by you on a regular basis for at least the previous 12 months.
The really great news for lots of architects is that even if you’re a sole practitioner without employees you can still count yourself as an employee and receive this incentive.
- The support package is on offer for up to 6 months, or until the end of September.
- Payments will be made to you monthly in arrears by the ATO.
- The subsidy began yesterday, which means the first payments will land in your bank account in early May.
- Unlike the cashflow boost incentive I examined in my last Covid-19 article, you will need to register for this scheme. You can do this at the ATO’s website here.
- Once registered, the ATO will get in contact with you to request supporting information demonstrating a downturn in your business.
- While receiving the subsidy, you will need to provide monthly reports on the number of eligible employees you employee.
- If you are a sole practitioner, you will receive $1,500 per fortnight.
- If you employ one or more people, you will receive $1,500 per employee per fortnight. You’ll need to pass on the payments to your employees and I think top them up so each employee receives her regular wages (I’ve not encountered clear direction on this, so this is at best an educated guess).
- If you’ve stood down an employee, you will receive $1,500 per fortnight and need to pass on the payments.
- If you’ve stood down an employee and then subsequently re-engaged her, you will receive $1,500 per fortnight and need to pass on the payments plus top up payments to match her regular wages.
- If you are Alan Joyce, you will receive a sassy $360,000,000 over the next 6 months.
Victorian business support fund
This is an update to my coverage last week of the state and territory stimulus packages. Included in Victoria’s $1.7b stimulus package is a $500m business support fund to “support the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail.” Upon closer investigation, it appears that any business that can demonstrate closure or severe impact as a result of Covid-19 can apply.
- You are eligible if your architecture practice is a small business that employs staff, has been forced to close or impacted by forced closures, has annual turnover greater than $75k and payroll of less than $650k.
- You will receive a $10,000 grant that can be used to “meet business costs, including utilities, salaries, rent; seek financial, legal or other advice to support business continuity planning; or develop [your] business through marketing and communications activities.”
- Applications opened yesterday and close on the 1st of June.
- It’s unclear when payments will be made, but my sense is that applications are assessed as they’re made and grants progressively awarded until the $500m cap is reached i.e. the first 50,000 businesses.
- You’ll need to apply for the grant at Business Victoria’s website here.
- As part of the application process, you’ll need to articulate how your business has been negatively affected by Covid-19 and provide a copy of your latest BAS.
- You are a diligent business owner who applies for the grant early and provides an articulate description of the ways in which Covid-19 has negatively affected you. You will receive $10,000 cash to support your business.
- You are a lazy business owner possibly under the influence of performance impairing drugs who does not apply for the grant early. You do not receive $10,000 cash to support your business.
And finally, there are a number of further resources you can examine to inform yourself about the full scope of the support initiatives on offer:
- Department of Treasury
- Australian Tax Office
- ABC interview with Treasurer Josh Frydenburg
Once again, I wish you all the best in your efforts to survive what are sure to be difficult months ahead, and hope we see each other on the other side of Covid-19 with all of our practices alive and well. A collection of Panfilo articles related to Covid-19 can be accessed here.
- Fact sheet: supporting businesses to retain jobs; Treasury Department; March 2020; page 1.
- Ibid; page 3.
- Economic survival package to support businesses and jobs; Victorian Premier; accessed March 2020.
- Business support fund; Business Victoria; accessed March 2020.
- Ultrastructure of the Covid-19 virus; sourced from New Scientist.