Waste Management Review will be running a four-part series throughout April on conquering waste industry challenges amid COVID-19 and possible future opportunities. In this first part, we highlight a summary of support packages available to the sector across each jurisdiction and what industry groups are hoping to see going forward.
The impact of COVID-19 is being felt by businesses across the country, with some industries more heavily impacted than others.
With no business immune to the social impacts and many facing economic challenges, Waste Management Review is committed to doing what we can to support you and your business during this difficult time. Feel free to reach out to Editor Toli Papadopoulos – directly on 0403 626 353 or firstname.lastname@example.org with any stories or ideas on how we can help.
Currently the question on everyone’s mind is: what support is available to your business in the immediate term? There are a broad range of support packages on a federal, state and territory level, but it remains to be seen what specific support will be offered to the waste sector.
The National Waste & Recycling Industry Council (NWRIC) last week called on state governments to provide waste and landfill levy relief to the sector. NWRIC CEO Rose Read last week said the NWRIC was calling on state governments to waiver landfill levy doubtful debts, put on hold all planned levy increases for at least six months and where appropriate consider waiving current waste and landfill levies for the next three months.
Waste Management Review has so far contacted the Victorian and Queensland Governments for clarity on this, in addition as to whether recycling will be considered an essential service. The UN is also urging global governments to recognise waste management, including medical, household and hazardous waste an “urgent and essential public service”.
Waste Management Review provides an update below of support packages available across the country. All states and territories are offering payroll tax relief in some capacity with federal initiatives such as the instant asset write-off also supporting equipment investments.
The information provided in this article may change and Waste Management Review will endeavour to update this article in real time. Please consult authorities in individual jurisdictions for further information.
As part of a $1.7 billion economic survival package, the Victorian Government has earmarked $500 million to establish a Business Support Fund to assist small to medium businesses most impacted by COVID-19.
The government will provide full payroll tax refunds for the 2019-20 financial year to small and medium-sized businesses with payroll of less than $3 million.
Applications are open for the $10,000 Business Victoria Grant. Eligibility criteria state that business turnover must be over $75,000 and the business must also engage employees. Payroll wages must also be under $650,000 and there should be a direct link between business closure/interruption and the COVID restrictions.
Mark Smith, Executive Officer of the Victorian Waste Management Association (VWMA), highlighted initial member feedback on the funding packages fell short of what he believed the industry needs at this time.
Nevertheless, he encouraged all business to see how this funding could apply to them.
“One of the challenges with the current pandemic is that no one really knows how this is going to play out and how the economy will be impacted. But one thing everyone in our industry knows is that waste doesn’t stop. So for me, government’s role is about ensuring our members are supported to keep doing what we do,” Mr Smith said.
Mr Smith said he’d like to see greater support provided directly to the industry, perhaps in the form of a safety net or assurance.
He said that this is based on the fact that as the sector continues to deliver the essential service of waste, that members are not left worse off for it due to invoices not being paid or contracts being unable to delivered.
“Each business will need to consider their own situation and I’d encourage our members to speak with their accountant and the VWMA about the packages they are interested in accessing. We’ve been doing promotions of capital expenditure investments, which in part is being funded by the Federal Government, that have a long-term benefit for your business like a solar install.”
A $2.3 billion stimulus package includes $450 million for the waiving of payroll tax for businesses with payrolls of up to $10 million for three months. Businesses will save a quarter of their annual payroll tax bill in 2019-20.
Tony Khoury, Executive Director of the Waste Contractors & Recyclers Association of NSW, acknowledged that WCRA and business more broadly were dealing with a range of unprecedented, rapidly changing and complex issues.
“These are difficult times and the world has not in recent times seen an issue such as Covid-19. There is an obligation on all government and business leaders to provide clear guidance and support,” Mr Khoury said.
“In recent days, I have witnessed a number of very positive conversations where competitors have expressed their intent and desire to wherever possible assist each other. And I’m sure that when this crisis is over, their desire for revenue growth, tonnes and extra metres will ensure that they revert back to being competitors.”
He said that WCRA will continue to monitor the issue and provide updates as they come to hand.
“However, not all organisations are structured in the same way and it will be up to each member to review the advice available with their own financial advisors.”
To ensure that the waste management industry is better placed to assess what are constantly changing issues, to better ensure consistency and to respond to Government, WCRA has formed an NSW COVID-19 Waste Management Sub-Committee. The Committee will be chaired by Susie McBurney, Remondis and include Ross Fox, Fishburn Watson O’Brien, Jason Blackmore, SIMS, Brent Lawson, Concrete Recyclers, Greg Turner, JR Richards, David Clancy, Cleanaway and Glenn Caffyn, WCRA.
Queensland is offering a $2.5 billion package for workers and industry, including up to $500 million rebate on electricity bills for all Queensland small and medium-sized businesses that consume less than 100,000 kilowatt hours.
The Queensland Government will offer an interest-free $500 million loan facility to support Queensland businesses impacted by COVID-19.
Payroll tax exemptions are available for employers who pay more than $6.5 million or less in Australian taxable wages. If you are an employer who pays more than $6.5 million in Australian taxable wages you can apply for a deferral for the 2020 calendar year or a refund tax for two months.
While further support for the waste sector in Queensland is ongoing, Waste and Recycling Industry QLD CEO Rick Ralph said it will be critical that waste and recycling is universally accepted as an essential service across the country.
“We need to ensure the system can function as normal as possible with waste and recyclables continue to be processed, as more waste arises particularly in the household,” Mr Ralph said.
“It is essential we mitigate the risk to community health that could come from any disruptions where the system is unable to function effectively.
“Ultimately, this is about our industry maintaining it high services capability. This ensures waste generators that are still functioning in this changed world, can also maintain their services capability as normal.”
Issues yet to be decided include possible Queensland waste levy waiver on bad debts from COVID-19, in addition to how waste could be linked to disaster management arrangements.
A Department of Environment and Science (DES) spokesperson would not be drawn into whether the government would be putting waste levies on hold at this stage.
On questions of whether clarifications of waste as an essential service would apply to recycling, they told Waste Management Review the Queensland Government is aware of the potential impacts for the waste and resource recovery sector at this time.
“The DES will continue to work with industry to develop solutions to any identified matters pertaining to the ongoing delivery of waste services and recycling activities, the spokesperson said.
“Both economic and operational considerations will be taken into account, while noting the need to ensure that business and manufacturing activities are consistent with state and federal health advice.”
The SA Government will inject $1 billion into the economy, including a $300 million Business and Jobs Support Fund, a six-month waiver for all businesses with an annual payroll of up to $4 million and employers with grouped annual wages above $4 million able to defer for six months.
WA has laid out a $607 million stimulus package, including one-off grants of $17,500 to small and medium businesses whose Australian taxable wages are between $1 million and $4 million. Payroll tax relief will come to 11,000 businesses as it is increased to $1 million from 1 July 2020, with deferral options available for other eligible businesses.
Michael Harper, Waste and Resource Recovery Industry Association of Western Australia (WRIWA) Chairman, says WRIWA members have been working closely with the Western Australian Local Government Association to develop a memorandum of understanding between the two.
“We want to keep communications open during this period and cooperate to ensure we don’t exacerbate what is already a public health crisis as a result of waste being left on the street and not being picked up,” Mr Harper said.
“We’re now going to the [WA Government Environment] Minister asking him not to amend the act, but instead put in place a waiver declaring waste management to be an essential service.”
“We want permission to keep landfills and transfer stations open. If a major landfill or transfer station goes down, the others will have to pick up the slack and we need to be prepared for that with extended opening hours.”
Mr Harper says WRIWA was also asking for short-term loans for small to medium enterprises to help them get through the challenging period.
“Lastly, we’re asking for a waiver on the landfill levy. We’ve reasoned it differently to the other states because we have a unique situation here.
“If the business community feels stressed, they’re going to be looking at any way they can to reduce their costs. In WA it’s so easy to run the material out of the city to avoid the landfill levy.”
“All you have to do is run it south of Perth to a transfer station that hides it among their other loads and you’ve saved yourself $1400 in levies on a 20-truck tonne.”
He says this should be passed down to those bringing material in, in addition to a bad debt waiver on the levy.
The Tasmanian Government is providing a $420 million stimulus package to support Tasmania to tackle the pandemic. This comprises loans from $20,000 to $250,000 to eligible businesses to support business continuity and supporting business plant and equipment. One-off grants are also available through the Business Continuity Grant.
The ACT Government is delivering a $137 million economic survival package with a six-month waiver on payroll tax for affected industries and payroll tax deferral for businesses with wages of up to $10 million.
Electricity rebates are also on offer for small business owners with electricity usage below 100 megawatts per year.
The Northern Territory has laid out a $65 million Jobs Rescue and Recovery plan to stimulate the economy. This includes the $20 million Business Improvement Grant with all territory businesses able to access a $10,000 grant, followed by an additional $10,000 if they contribute $10,000 on their own.
Prime Minister Scott Morrison announced a $66 billion economic recovery package, including $250,000 guaranteed by the Commonwealth for small to medium enterprises for terms of up to three years with no repayments due in the first six months. Sectors with annual turnover of up to $50 million will also be eligible for tax-free cash payments between $20,000 and $100,000.
Cash flow assistance for businesses:
Up to $100,000 is on offer to eligible small and medium sized businesses and not-for-profits, including charities that employ people as at 12th March 2020, with a minimum payment of $20,000. This will be delivered in two amount. The initial $10,000 – $50,000 will be based on PAYG withheld from March – June 2020 and credited to your BAS account on the lodgement due dates. The second amount will be delivered monthly from July – October, each month being a quarter of amount one.
Up to $145 billion in support for credit to flow through $20 billion of loan guarantees for small businesses and actions announced on 20 March to support $90 billion of business lending in tandem with the newly lowered business interest rates.
Delivering support for business investment:
An increase in the instant asset write-off threshold from $30,000 to $150,000 will help operators invest in equipment with expanded access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
This will allow operators to have a lower taxable profit at year end and therefore less income tax to pay, rather than a slower depreciation cycle causing a profit and income tax payable which impacts cashflow.
Assistance from the banking sector:
Australian banks will defer loan payments for small businesses affected by COVID-19 for six months. The assistance package will apply to more than $100 billion of existing loans and may put as much as $8 billion back into the pockets of small businesses.
This will help a range of businesses by taking the pressure off cashflow and allowing them to redirect funds to other costs. This will become increasingly important as some businesses encounter a drop in trade and increase in debtor payment times.
Tips to prepare businesses:
Ben Chiverton, a Partner at Nagle Accounting, said every situation will be unique. Because of this, his general advice is to contact your landlord for rent relief if you are suffering from reduced revenue.
“They should be eligible for a pause on their loan of up to six months and are being actively encouraged by the Federal Government to work with you in times of financial distress,” he said.
He added that the new Job Seeker payment may support any roles that have been impacted.
“The JobKeeper payment is being rolled out now to help subs wages for businesses with significantly reduced turnover. Further details to come from the ATO in the coming days,” he said.
In the next part of this four part series, Waste Management Review explores the importance of mental health during this time and supporting programs offered by organisations.
During a crisis such as COVID-19, the industry landscape can be changing daily. Prime Creative Media, the publisher of Waste Management Review, offers further tips on how to stay connected with your clients here.