Australia: Small business loan guarantee scheme extended; new tourism package announced (COVID-19)
Australia: Small business loan guarantee scheme
A number of economic support measures have been announced for businesses, as the economy transitions from the government’s wage subsidy offered in response to the coronavirus (COVID-19) pandemic.
The government announced an expansion to its loan guarantee scheme for small and medium-sized enterprises (SMEs), by increasing the loan amounts and the eligibility criteria for businesses.
With the JobKeeper payment due to end in March 2021, the government also announced a $1.2 billion* tourism and aviation industry economic support package. It’s expected more than 350,000 current recipients of JobKeeper will be eligible for the expanded SME loan guarantee scheme. To date there have been 35,000 loans made, valued at $3 billion. The scheme has $40 billion allocated.
Under the revised scheme, changes include:
- An increased government guarantee from the current 50/50 split between the government and the financial lenders to an 80/20 split
- An increase to the size of eligible loans, from $1 million to $5 million
- An increase to eligible turnover from $50 million to $250 million
- Increased maximum loan terms from five to 10 years
- Allowing lenders to offer borrowers a repayment holiday of up to 24 months
- Allowing eligible businesses to refinance their existing loans
Loans will be available from 1 April 2021 and must be approved prior to 31 December 2021.
Tourism and aviation package
The government stated that its tourism package is designed to support businesses, workers, and regions as they recover from the COVID-19 economic down-turn.
The package sponsors 800,000 half-price airfares to 13 key tourism regions. Other financial support will target:
- International passenger airlines to maintain more than 8,000 core international aviation jobs
- Regular passenger airports to meet their domestic security screening costs
- Ground-handling companies to meet the costs of mandatory training, certification, and accreditation to maintain workforces
- The reinstatement of domestic aviation security screening cost rebates for more than 50 regular passenger airports
Additional measures announced
Other programs to be extended by the government include:
- Domestic Aviation Network Support (DANS) and Regional Aviation Network Support (RANS) programs
- 50% waiver of domestic air services charges for regular public transport (RPT) and aeromedical flights
- International freight assistance mechanism
- $50 million business events grants program extended by three months to support Australian businesses to hold multi-day business events, covering up to 50% of costs incurred in participating business events during the 2021 calendar year
- $94.6 million zoos and aquarium program extended by six months to support zoos, aquariums, and wildlife parks to maintain their animal populations when their tourism revenue has been affected
- The COVID-19 consumer travel support program extended for three months beyond 13 March 2021
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.