- The Queensland Government will allow small and medium businesses affected by coronavirus to defer their payroll taxes for six months.
- Businesses with wage bills of up to $6.5 million can assess for themselves whether their business has been impacted by the coronavirus.
- It comes after the state government announced a $27.25 million package of measures to help businesses across the state.
- Visit Business Insider Australia’s homepage for more stories.
Small to medium business owners in Queensland will be able to defer their payroll taxes for six months amid the coronavirus outbreak.
The Queensland government rolled out the new payroll tax scheme on Monday, which lets small businesses with a wage bill of up to $6.5 million defer their payroll tax payment for six months if their business has been affected by the coronavirus.
Business owners will have to assess for themselves whether economic factors like their profit, turnover, bookings or contracts have been affected by business conditions associated with coronavirus.
It dates back to the travel ban Australia enforced on any international travellers who've been in China on February 1. And businesses that opt for a deferral won't have to pay it back until August 3rd.
“Small and medium businesses are especially vulnerable to these external shocks, so today we are giving them the option to defer their payroll tax obligations for six months, backdated to when the travel ban started on 1 February," Deputy Premier, Jackie Trad said in a statement.
It comes after the Queensland government announced a $27.25 million for a range of measures to help businesses across the state that were impacted by the coronavirus. This included promoting tourism and waiving fees associated with liquor licenses.
"We’ve known from the start the impact of the virus is evolving, so our measures to address it must evolve as well," Trad added.
The initiative will be available to small and medium businesses across all sectors, with the state treasury's Office of State Revenue able to help them create repayment plans for the deferred taxes.
Minister for Employment and Small Business Shannon Fentiman said in a statement, “The most immediate impact of coronavirus has been on the tourism, export and education sectors. But we recognise that as the outbreak spreads, its impacts spread as well."
Robert Breunig, Director of the Tax and Transfer Policy Institute, told Business Insider Australia the economic impacts of coronavirus "are likely to be quite large".
Analysis from PriceWaterhouseCoopers found that the coronavirus could cost the Australian economy $2.3 billion and around 20,000 jobs. The tourism industry is also taking a hit, losing around $1 billion a month from the travel ban, according to the Australian Financial Review.
"I think [the] government is trying to be proactive in helping people get through that impact of coronavirus," Breunig told Business Insider Australia. "And that's a good thing. We want government policy to respond to these kind of macroeconomic shocks to help people smooth through bad times."
Breunig said that for business owners who want to determine whether they have been impacted by the coronavirus, there are two key elements he would look at.
"One is, if I compare my sales in this three-month period to last year's three-month period, do I see that they're way down?" he said.
"And then the second thing is, what does the long term trend of my sales look like?"
He added that many businesses may have a lot of sales in December and not so many sales in February, so rather than looking at day-to-day sales, it's important to look at longer trends.
Breunig also warned of the dangers of deferring taxes.
"The danger of these deferral policies, of course, is that firms think, 'Oh, well, I don't have to pay this tax and so I'm going to go out and spend it'," he said.
"People might just spend their money and then come the third of August, they don't have enough money to pay their debt. So this is always the danger of letting debt accumulate, it becomes more and more difficult to service that debt."