Business

$1.7 billion survival package to save Victorian businesses

$1.7 billion survival package to save Victorian businesses

Payroll tax refunds and a reprieve on loans are part of a $1.7 billion survival package for Victoria’s businesses. If you run a small business here’s what you need to know.

Small businesses will get cash refunds on their payroll tax bills and a six-month reprieve on their loans to prevent them going to the wall during the coronavirus crisis.

More than $550 million in payroll tax already paid by 24,000 Victorian small businesses, which employ about 400,000 workers, will be sent back to them from next Friday.

The cash injection, applying to businesses with a payroll of less than $3 million, will provide most with about $23,000 in immediate support, with some to receive up to $113,975.

It is part of a $1.7 billion economic survival package unveiled by Premier Daniel Andrews today, with further state government support also in the works.

Mr Andrews will also put $500 million into creating a “Working for Victoria” fund to get people who have lost their jobs back into the workforce.

“We have an enormous amount of virus related work to be done, whether it’s cleaning trams, delivering support packages — there are many tasks that will need to be performed for all Victorians and it just makes sense to re-employ people who are out of work,” he said.

Mr Andrews said his government had “taken the time to listen” to those in need.

“Now we’re taking unique and unprecedented action to help businesses and their workers through this crisis,” he said.

“The most important thing for businesses right now is cash to save them and their workers. This is all about helping businesses get to the other side of this crisis.”

The state government’s $1.7 billion plan comes on top of $537 million in immediate support to Victoria’s health system. The federal Budget has been delayed until October 6 because of the crisis.

BIG BANKS FREEZE LOAN REPAYMENTS

Amid fears of a recession, Australia’s big banks yesterday stepped up to freeze loan repayments on $100 billion of small business borrowing.

Australian Banking Association boss Anna Bligh said the move could put $8 billion back in the pockets of small businesses.

“This is a multibillion-dollar shot in the arm for small businesses when they need it the most,” Ms Bligh said.

Fast-tracked processes are being put in place and the deferrals could be available as soon as Monday.

“Businesses, I know, are doing it very tough,” she said.

“They can rest assured that banks have got their back.”

Federal Treasurer Josh Frydenberg said the banks were “playing their part in Team Australia”.

“Their decision to defer payments by small businesses for six months will be a substantial boost to confidence and the spirit of millions of Australian small businesses. It’s a game changer,” he said.

Mr Frydenberg and Prime Minister Scott Morrison are expected to unveil billions of dollars in economic support tomorrow, with the Treasurer flagging the package will include cutting red tape to help businesses access capital quickly.

It follows a co-ordinated move by Reserve Bank and the federal government to fire what Mr Frydenberg described as a “$105 billion bazooka” to free up cheaper cash for banks to lend to businesses.

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