Barton Deakin Brief: Increased National and NSW COVID-19 Financial Support

 13 July 2021

Introduction

The NSW and Federal Government will provide increased financial support to individuals and businesses in the wake of the NSW COVID-19 outbreak and lockdown. This support will be distributed in the form of increased COVID-19 Disaster Support payments to individuals, payroll tax refunds and support payments for businesses, and through taxation relief. Further, the NSW Government will increase funds for mental health services, specifically targeting citizens under lockdown in the Greater Sydney/NSW region.

The Federal Government has in alignment with its NSW support upgraded its national response to COVID-19 outbreaks with new national arrangements consisting of increased weekly payments for households, and boosting business cash flow to get them through extended lockdowns.

Overview

• The NSW support measures come at a total cost of $500 million per week. This brings the total cost of the lockdown measures to $5.1 billion.
• The new small business support payment is estimated to support 500,000 SMEs employing more than 3 million individuals.
• The support measures will begin on week four of the lockdown.

Commonwealth COVID-19 Disaster Payment and Tax Relief

• Workers who have lost more than 20 hours per week shall now receive $600 instead of $500.
• Workers who have lost between 8 and 20 hours of work per week shall receive $375 per week instead of $325.
• These payments will reoccur weekly for the duration of the lockdown. Recipients will no longer be required to apply for payments each week.
• From 18 July 2021 the NSW Government will fund the COVID-19 Disaster Payment to those outside Commonwealth declared hotspots in NSW that meet the criteria for the payment.
• Information about how to apply for COVID-19 Disaster Payments can be found on the Services Australia website here.

The Commonwealth will provide additional support through the tax system, by:

• Making NSW small business grants (including the new small business payments) tax exempt.
• Providing administrative relief to NSW taxpayers facing hardship.
  • This includes reduced payment plans, no interest charged on late payments and varying installments on request.

Landlords

A 60-day eviction moratorium will apply for residential tenants who have lost 25 per cent of their income.

The following schemes will be implemented by the NSW Government to support landlords and tenants during this period:

• Residential landlords who decrease rent can apply for a $1,500 grant.
• Commercial, retail and residential landlords who reduce rent for financially distressed tenants are eligible for a land tax concession of up to 100 per cent of the 2021 land tax year liability.
• Commercial and retail landlords are required to attempt mediation before recovering a security bond or evicting a tenant impacted by the lockdown.

Business Support

The NSW Government will commit $5.1 billion, including more than $1 billion from the Commonwealth to the following set of financial support schemes:

• The NSW business grants program announced two weeks ago will be expanded, with grants between $7,500 and $15,000 available to eligible businesses with annual wages up to $10 million.
• Microbusinesses with turnover between $30,000 and $75,000 will have access to a new grants program of $1,500 per fortnight.
• From Week 4 of the NSW lockdown (starting 19 July), the Commonwealth will fund 50 per cent of the cost of a new small and medium business support package, which will be administered by ServiceNSW.
• Eligible businesses will receive 40% of their NSW payroll payments, which will be a minimum of $1,500 and a maximum of $10,000 per week.
• Eligible businesses will have a decreased turnover of 30 per cent than an equivalent two-week period in 2019.
• The support payment will be available to non-employing and employing entities in NSW (including non-for-profits) with an annual turnover between $75,000 and $50 million.
• Such businesses will be required to maintain their full time, part time and long-term casual staffing level as of 13 July 2021.
• Eligible non-employing businesses, such as sole traders, will receive $1,000 per week.

NSW Tax Relief

The NSW Government will provide additional support through the tax system:

• Land tax relief equal to the value of rent reductions provided by commercial, retail and residential landlords to financially distressed tenants, up to 100 per cent of the 2021 land tax year liability.
• Short-term eviction moratorium for rental arrears where a residential tenant suffers loss of 25 per cent due to COVID-19.
• No recovery of security bonds, or lockouts or evictions of impacted retail and commercial tenants prior to mediation.
• Deferral of gaming tax assessments for clubs until 21 December 2021 and hotels until 21 January 2021.

Mental Health and Sector-specific Support

The Commonwealth and NSW governments will fund a $17.35 million mental health support package for NSW, including for Lifeline, Headspace and Kid’s Helpline.

This adds to measures funded by the NSW Government including:

• $75 million support package for the performing arts sector to be administered by Create NSW.
• $12 million in for temporary accommodation for those at risk of experiencing homelessness.
• A support package for the accommodation sector worth $26 million.

More Information

To read the Prime Minister’s media release, see here.

To view Barton Deakin’s COVID-19 Briefs, see here.

For more information, contact David Alexander on +61 457 400 524, Grahame Morris on +61 411 222 680, Cheryl Cartwright on +61 419 996 066, Jack de Hennin on +61 424 828 127, or Nicholas Rigby on +61 468 913 175.