Victorian Premier announces further assistance for business

Many Victorians were hoping for an end to lockdown on 13 September, however restrictions are to continue for some time yet to come as the state grapples with the new Coronavirus Roadmap to COVID Normal.

Amid mounting pressure from SMEs and business groups, Victorian Premier Daniel Andrews has announced a further $3 billion “Business Survival and Adaptation Package” to support businesses that continue to operate a reduce capacity or who have been forced to shut their bricks and mortar shopfronts under current work and travel restrictions.

Further to this, the Andrews government announced yesterday a $290 million assistance package, targeting the hospitality sector, Melbourne CBD businesses and sole traders.

The announcements were made on 13 and 14 September 2020 and include the following measures.

Business Support Fund – Third Round

The Government will further extend its existing Business Support Fund, adding an additional $822 million to businesses most affected by coronavirus restrictions.

  • Cash grants of $10,000 for employing businesses with payrolls of up to $650,000.
  • Cash grants of $15,000 for employing businesses with payrolls between $650,000 and $3 million.
  • Cash grants of $20,000 for employing businesses with payrolls between $3 million and $10 million.

This third round of cash grants is expected to reach up to 75,000 eligible businesses.

It is estimated that more than 108,000 Victorian businesses have already shared in the first two tranches of business support funding, equating to an estimated $1.47 billion.

Applications for third round grants open on 18 September 2020 and no further details are available on what criteria will need to be met, but indications are that it will apply to those sectors which will remain closed, restricted or heavily restricted as metropolitan Melbourne and regional Victoria reopens.

Further details will be made available here:

Business Adaptation Package

The Victorian State government will provide a package worth $44 million to assist businesses to transform and adapt their operating models to work in a world of social distancing and limited retail outlets, including:

  • $20 million voucher program to assist sole traders and small businesses in building their digital capability by providing access to off-the-shelf digital programs (such as Shopify or SquareOnline), training and workshops designed to help businesses adapt to online operations.
  • $15.7 million package to help Victorian exporters get their products to market, address logistics and supply chain issues caused by the pandemic, establish new trade and export channels, and connection to international markets via virtual trade missions.
  • $8.5 million expansion to the ‘Click for Vic’ campaign to encourage more Victorians to support local businesses, including marketing and advertising, and expanding the digital platform and its partnerships with third-party e-commerce providers.

Sole Trader Support Fund

Sole traders who have sometimes been left out in the cold by previous stimulus measures may now get access to a $100 million Sole Trader Support Fund aimed at providing relief to eligible sole traders working in sectors of the economy that will continue to be affected by restrictions, like media and film production, creative studios, outdoor entertainment, private museums and galleries and gym owners.

Grants of $3,000 will be made to sole traders who are a tenant or licensee in a commercial premises or location and operate in a sector of the economy that is restricted, heavily restricted or not opening under the Second Step of the Roadmap.

Note that sole traders who operate from a home office or who will be able to reopen on 28 September 2020 (or equivalent Second Step date as determined by the State Government) will be unlikely to qualify.

Outdoor Eating & Entertainment Package

Funding announced yesterday focuses on moving the Victorian indoor dining experience outdoors, allocating $87.5 million to councils and businesses outside of Melbourne’s CBD to make widespread outdoor dining safe and practical.

  • Grants of $5,000 available to licensed and unlicensed cafés, restaurants, takeaway food businesses, pubs, taverns, bars and clubs with a payroll of less than $3 million, to be spent on expansion of outdoor dining facilities, including umbrellas, outdoor furniture, screens and other equipment, as well as staff training, advertising, and the other support to transition businesses to outdoor dining.
  • $29.5 million allocated to local councils to support the implementation of swift and streamlined permit, enforcement and monitoring processes. Metropolitan and regional city councils will be eligible for $500,000 grants, and $250,000 grants for rural councils. There is an expectation that some of this council funding will be passed onto businesses in the form of reducing or waiving permit fees or invested in infrastructure such as streetscaping and lighting.

Licenced Hospitality Venue Fund & Waiver of Liquor License Fees

Establishment of a $251 million dedicated Licenced Venue Fund to support Victoria’s hospitality businesses, which includes:

  • Grants of up to $30,000 for licensed pubs, clubs, hotels, bars, restaurants and reception centres, based on their venue capacity and location.
  • Waiver of 2021 Liquor Licence fees (expanded from the previous waiver of fees for 2020), expected to equate to $27 million in forgone state revenue across the sector.

Melbourne City Recovery Fund

In partnership with the Melbourne City Council, a $100 million fund will be established to assist businesses to move their activities outdoors and to fund COVID safe infrastructure and events.

The fund will include:

  • $30 million in grants for small to medium sized businesses to rapidly adapt their operations to be more COVID Safe and comply with health directions, pay for equipment, convert spaces like rooftops and courtyards into hospitality zones and remodel internal layouts to allow for the better flow of patrons.
  • $30 million for COVID Safe events and cultural activities to attract visitors back to the central city.
  • $40 million on infrastructure works to support the return of people to the central city through making the city more safe, accessible and sustainable.

2020-21 Payroll Tax Deferrals Extended

Announced 10 July 2020, deferrals were extended to businesses with payrolls of up to $10 million to defer their payroll tax liabilities for the first half of the 2020-21 financial year.

Deferral dates for payments of these amounts have been extended out a further nine months, and now include liabilities for the full 2020-21 year, with new payment dates being as follows:

  • Liabilities for July, August and September 2020 will be due on 7 September 2021.
  • Liabilities for October, November and December 2020 will be due on 7 December 2021.
  • Liabilities for January, February and March 2021 will be due on 7 March 2022.
  • Liabilities for April, May and June 2021 will be due on 7 June 2022.

Land Tax Reductions

Announced on 20 August 2020, the Victorian Government announced further land tax relief for landlords as part of its extension of the commercial and residential tenancy relief schemes until 31 December 2020.

  • Land tax reductions of 50% for eligible landlords of residential and commercial properties who provide a 50% or more outright rent waiver of at least 3 months’ rent to eligible tenants can claim a 50% waiver of 2020 land tax and defer payment of the remaining tax to 31 March 2021.
  • Land tax 25% reduction for owner occupiers of commercial properties can obtain a 25% waiver of the 2020 land tax and payment of the remaining tax can be deferred to 31 March 2021 (subject to certain conditions).

More information on the new reductions and eligibility criteria can be found on the SRO’s website here:

Regional Victorian Property Stamp Duty Concessions

Following the recent Victorian bushfires, the Victorian Government passed legislation in April 2020 to bring forward the 50% stamp duty discount for contracts entered into on or after 27 January 2020 to buy commercial or industrial property in bushfire affected local government areas.

On 13 September 2020, the Victorian Government announced that the 50% stamp duty discount for commercial and industrial property across all of regional Victoria will be brought forward to 1 January 2021.

To qualify, the dutiable property must be used solely or primarily for a qualifying commercial or industrial land use for a continuous period of at least 12 months, commencing in the two years following the date of transfer.

Other State Tax Waivers and Deferrals

  • 25% waiver of 2020 congestion levy liabilities, with the due date for paying the balance of 2020 congestion levy liabilities extended until 31 March 2021, estimated to amount to $30 million.
  • A full waiver of 2021 Vacant Residential Land Tax liabilities that would ordinarily apply to residential properties in Melbourne’s inner and middle suburbs that are vacant for more than six months in 2020, in acknowledgment that with travel restrictions in place and property inspections currently restricted, many properties that would otherwise be occupied are vacant.
  • $33 million to defer the planned increase in the landfill levy for six months, normally passed on to Victorian ratepayers through their charges for kerbside rubbish collections and waste management charges.

Other Funding Announcements and Grants

  • $3 million dedicated to Business Chambers and Trader Groups, consisting of grants of up to $20,000 to support members of metropolitan and regional business chambers and trader groups in adapting to “COVID Normal” trading conditions.
  • $4.3 million dedicated to Alpine businesses, consisting of grants of up to $20,000 to help alpine businesses pay a service charge to Alpine Resort Management Boards.
  • Commercial Landlord Hardship Fund, consisting of grants of up to $3,000 per tenancy to eligible small private, individual and joint-owner landlords who may not have the capacity to provide rent reductions to their tenants under the requirements of the Commercial Tenancy Relief Scheme.

Applications for the Commercial Landlord Hardship Fund close on 14 October 2020.

Eligibility criteria and application forms can be found here:

Please contact your local Bentleys advisor for further information. We are doing everything we can to help businesses come out of this challenging time in good shape.

Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.

COVID-19: A summary of Australia's tax measures

The governments of Australian states and territories have also released independent stimulus packages. For an overview of all Australian measures, click here.

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