UPDATE: 22 March
Earlier today PM Scott Morrison and Treasurer Josh Frydenberg announced a further raft of stimulus.
We will provide you with further detail and analysis tomorrow, but in the meantime here are some links to fact sheets and other information detailing the extra stimulus.
On 12 March 2020, the government announced a package of measures to help the economy withstand and recover from the economic impact of coronavirus (COVID-19). The package is wide-reaching, including measures to fast-track investment, cash payments for small and medium businesses to save jobs and subsidies to help keep apprentices employed.
In this article, we will break down a few key aspects of the package and explain how you may be impacted. As always, please do not hesitate to contact our friendly team for further information.
Cash Flow Assistance
- The Boosting Cash Flow for Employers measure will provide up to $25,000 back to businesses, with a minimum payment of $2,000 for eligible businesses.
- Small and medium business entities with aggregated annual turnover under $50 million and that employ workers will be eligible. Eligibility will generally be based on prior year turnover.
- The payment will be delivered by the ATO as a credit in the activity statement system from 28 April 2020 when eligible businesses lodge (see below) upcoming activity statements.
- Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50% of the amount withheld, up to a maximum payment of $25,000.
- Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax.
The Australian Government have released fact sheets with further information including tables and examples. Click below to view the fact sheet.
Business Investment Support
- The government is increasing the instant asset write-off (IAWO) threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million).
- The government is introducing a time limited 15-month investment incentive to support business investment and economic growth over the short-term, by accelerating depreciation deductions. This applies to assets acquired after announcement and first used or installed by 30 June 2021.
- A deduction of 50% of the cost of an eligible asset on installation will apply, with existing depreciation rules applying to the balance of the asset’s cost. This deduction will end 30 June 2021.
- This proposal applies from 12 March 2020 until 30 June 2020, for new or second-hand assets first used, or installed ready for use in this timeframe.
Your business may now qualify for the instant asset write-off. Please contact us to discuss threshold and grouping of assets. We can also help you understand how March BAS’s may be affected.
The Australian Government have released fact sheets with further information including tables and examples. Click below to view the fact sheet.
Workforce
- $7000 each quarter in wage subsidies for employers who employee less than 20 people to save the jobs of 120,000 apprentices. Subsidies will be backdated to 1 January 2020 and will run until 1 September 2020.
- Waiting times for a government sickness allowance will be waived for casual workers forced into self-isolation.
Individuals
- One-off payment of $750 to social security, veteran and other income support recipients and eligible concession cardholders to support. Over 90% of payments will be made by mid-April 2020.
- Deeming rates for pensioners cut by 50 basis points in response to the most recent decision of the Reserve Bank of Australia.
Support for regions and communities
- Initial $1b allocation to support those regions and communities that have been disproportionately affected by the economic impacts of the coronavirus – including those heavily reliant on tourism, agriculture and education.
- This will include the waiver of the Environmental Management Charge for tourism businesses that operate in the Great Barrier Reef Marine Park and the waiver of entry fees for Commonwealth National Parks. It will also include additional assistance to help businesses identify alternative export markets or supply chains.
Please keep in mind that this plan was announced very recently. It is possible that future updates are coming. In the meantime, please contact our friendly team for further clarification.
For a specific breakdown of how this impacts your business, contact your relevant partner.
Additional Resources
The Australian Government have released a series of informative fact sheets to help break down the package. Please click the buttons to access available fact sheets.
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