Architecture firms that fall into the small- or medium-sized business categories will be eligible for cash payments of up to $100,000, as part of the latest economic stimulus package announced by the federal government in response to the COVID-19 pandemic.
The Association of Consulting Architects Australia conducted a survey of practices and their anticipated impacts ofthe pandemic. Preliminary results reveal 57 percent of practices have either had projects cancelled or are anticipating projects to be cancelled.
Prime minister Scott Morrison announced the package worth $66 billion on 22 March, in addition to the $17.6 billion “boosting cash flow for employers” measure announced on 12 March.
Under the earlier measure, small and medium businesses could apply for up to $25,000 in cash, with a minimum payment of $2,000. This has been upgraded, so that businesses with turnovers below $50 million (and not-for-profits that employ people) will get a payment of 100 percent of the tax they withhold from workers’ wages, up to a maximum of $100,000. Eligible businesses will be given a minimum of $20,000, even if they don’t withhold tax.
The government estimates about 690,000 businesses, employing about 7.8 million people, will be helped, as well as some 30,000 not-for-profit enterprises. According to 2016 Census, there are 16,991 people employed in the architecture workforce.
This tax-free cash payment is supplemented by a range of measures aimed at keeping business afloat and employing workers:
– The instant asset write-off threshold has been increased from $30,000 to $150,000 and access has been increased to include all businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
– The government is offering a guarantee of 50 percent for new unsecured loans of up to $250,000. This is available for businesses with a turnover of up to $50 million.
– The “backing business investment” measure is a time-limited 15-month investment incentive to support business investment and economic growth over the short-term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct 50 percent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset cost. This will apply to assets used or installed by 30 June 2020.
– There are also a number of measures aimed at providing temporary relief for financially distressed businesses, including a temporary increase in the threshold at which creditors can issue a statutory demand on a company (from $2,000 to $20,000) and the time companies have to respond to statutory demands (21 days to six months), and a temporary increase in the threshold for a creditor to initiate bankruptcy proceedings (from $5,000 to $20,000).
For further details of treasury’s economic response, head here.
The ACA is also keeping an up-to-date list of stimulus measures in place, including those being made available by state and territory governments, here.
In addition to the support for business, the federal government has temporarily doubled the Jobseeker Payment, previously called Newstart, which will also be made available to eligible sole traders during this time.
