UPDATED: How the Morrison Government’s economic support packages will help farm businesses

On March 12, Prime Minister Scott Morrison announced a $17.6 billion ‘economic plan’ to keep the economy and businesses afloat in the face of unprecedented challenges posed by the spread of the novel coronavirus.

Big winners from the package include vulnerable members of the community as well as small businesses.

On March 22, the Prime Minister injected a further $66.1 billion into the economy as businesses face months of shutdown ahead.

A third package was unveiled on March 30, titled the 'JobKeeper Payment' to help affected businesses keep staff on the books until they can resume normal operations.

What do these packages mean for you and your business and how will you benefit from it? We break it down for you:

The instant asset write off threshold has been increased from $30,000 to $150,000.

Access to the write-off has also expanded to include businesses with annual turnover of less than $500 million, up from $50 million, until December 31, 2020.

This means businesses can immediately write-off assets of larger value such as tanks, trucks and tractors.

In addition, eligible businesses will also be able to deduct an additional 50 per cent of the asset cost in the year of purchase.

Small to medium businesses with a turnover of less than $50 million, as well as not-for-profit organisations that employ staff between 1 January 2020 and 30 June 2020 will be eligible for a minimum payment of $20,000, up to $100,000.

The payment will be tax free and issued automatically based on business activity statements or instalment activity statements from April 28. Employers will receive 100 per cent of their salary and wages withheld as an incentive to hold on to their workers.

From July 28, eligible businesses and organisations will also receive an additional payment equal to the total of all of the cash flow boost received in the previous period.
Coronavirus Small and Medium Enterprises (SME) Guarantee Scheme

Under the scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to small and medium businesses (SME) with a maximum loan amount of $250,000 per borrower.

Initially ending on September 30, 2020, the program has been extended to June 31, 2021.

The scheme is available to SMEs, including sole traders and not-for-profits, with a turnover of up to $50 million.

Loans will be for up to three years, with an initial six month repayment holiday.

From 1 October 2020, eligible lenders will be able to offer loans with the following enhancements:

The scheme complements announcements made by Australian banks to support small businesses with their existing loans.

If you currently employ apprentices or trainees on your operation, this measure will be of great help.

Eligible small and medium businesses will be able to apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage from January 1, 2020 to March 21, 2021.

In this context, a small business is an organisation employing less than 20 people while a medium business is one which employs fewer than 200 people.

In the case a business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.

Businesses involved in food production and those supplying products and services to these operations have been able to continue operating as per normal so far and keep staff employed.

However, if some operations have found themselves to be in financial strife due to the challenges COVID-19 has presented, they may be eligible for the JobKeeper package that allows them to keep their staff on the books and be able to continue paying their staff, benefiting both the employee and employer.

On July 21, the Government has announced an extension of the program which will see the scheme supporting businesses and individuals until March 28, 2021.

The payment is $1500 per fortnight per eligible employee until September 28, 2020. From there, payments will taper off to $1200 in the December quarter and then $1000 in the following quarter ending March 28, 2021.

From September 28, payment will also differ for employees who worked less hours pre-pandemic.

Eligible businesses can simply apply for the payment online via ato.gov.au.

To be eligible, your business will have to have suffered a drop in revenue of 30 per cent or more, since 1 March 2020 over a minimum one-month period. This applies to businesses with annual turnover of less than $1 billion.

Employers with an annual turnover of $1 billion or more would be required to demonstrate a reduction in revenue of 50 per cent or more to be eligible.

Businesses can begin distributing the JobKeeper payment immediately and will be reimbursed from the first week of May.

The Morrison Government has also announced $1 billion to assist specific sectors that will be more heavily affected than others in the current climate, such as tourism, agriculture and education.

This will include funds to help farm businesses identify alternative export markets or supply chains. How the funds will be distributed is still unclear.

Recipients of the Farm Household Allowance will receive an extra $550 per fortnight, on top of the existing payments they currently receive. The cash boost is also available to recipients of JobSeeker payments, Youth Allowance, Parenting Payment and Special Benefit.

The payment, dubbed the 'Coronavirus supplement', will be paid for the next 6 months.

Members of the community that receive income support such as pensioners, social security, farm household allowance (FHA), veteran and eligible concession card holders will receive an initial payment of $750 per person to be made from March 31 on a progressive basis.

The payment is tax free, with over 90 per cent of payments expected to be made by mid-April.

Then, another $750 will be available to social security and veteran income support recipients and eligible concession card holders, except for those who are eligible for the Coronavirus supplement. This includes those receiving the FHA. The second round of $750 will be paid automatically from July 13, 2020.

We will continue to update this article with new support measures as they come through.