This morning, the Morrison Government announced a $17.6 billion economic stimulus package to support Australian businesses as we are dealing with the significant challenges posed by the spread of the coronavirus.
The package has four components:
- Supporting business investment
- Providing cash flow assistance to help businesses
- Targeted support for the most severely affected sectors, regions and communities
- Household stimulus package
The new measures will need to be introduced in the Parliament when it returns on 23 March 2020.
Delivering support for business investment
The instant asset write off threshold will increase from $30,000 to $150,000 and expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
Further, a 15 month investment scheme will be introduced (through to 30 June 2021) by providing accelerated depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50% of the asset cost in the year of purchase.
Cash flow assistance
A grant of up to $25,000, with a minimum payment of $2,000, for businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payments will be tax free to recipients.
It is intended that eligible businesses will receive this refund in their Business Activity Statements of Instalment Activity Statements due 28 April 2020 with refunds payable within 14 days.
Eligible employers can apply for a wage subsidy of 50% of apprentices’ or trainees’ wages for up to 9 months from 1 January 2020 to 30 September 2020.
Stimulus payments to households
A one-off $750 payment will be made to pensioners, social security, veteran and other income support recipients and eligible concession card holders. Payments will be from 31 March 2020 on a progressive basis, with over 90% of payments expected to be made by mid-April.
Assistance for severely-affected regions
$1 billion to support those sectors, regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.
The Government has also announced that it will offer administrative relief for certain tax obligations, including deferring tax payments up to 4 months.
We will be keeping a close eye on the introduction of the stimulus package when the Parliament returns on 23 March 2020.
We will be continuing to monitor the quickly evolving landscape and keep you updated but if you have any questions regarding the above you can contact us here.
Thank you for your continued support and we hope you all stay safe.