The Buzz - COVID19 Stimulus Packages
Coronavirus (COVID-19) Stimulus Package
In response to the Coronavirus (COVID-19), the Government today announced a range of measures to assist business and individuals in the form of a $17.6 billion economic stimulus package. The package has been marketed as a measure to protect the economy by maintaining confidence, supporting investment and keeping people in their jobs.
It is expected that an appropriate package of Bills (which will provide further detail in relation to the proposed measures) will be introduced into Parliament in the final sitting week in March 2020 (i.e., presumably from 23 March 2020) for urgent consideration and passage.
The Key Measures include:
BUSINESS INVESTMENT (these measures start today - legislation, if passed, will be backdated to today):
$700 million to increase the instant asset write off threshold 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
$3.2 billion to back business investment by providing a time limited 15-month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase.
CASH FLOW ASSISTANCE FOR BUSINESSES:
$6.7 billion to Boost Cash Flow for Employers by up to $25,000 with a minimum payment of $2,000 for eligible small and medium-sized businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that currently employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax free. This measure will benefit around 690,000 businesses employing around 7.8 million people.
In terms of eligibility, businesses with a turnover of less than $50 million that withhold tax on their employees’ wages will receive a payment equal to 50% of the amount withheld, up to a maximum $25,000.
Enterprises that pay wages will get a $2000 minimum even if they are not required to withhold tax. Businesses will receive these payments following lodgement of their BAS or IAS from 28 April 2020 with refunds to then be paid within 14 days.
$1.3 billion to support small businesses to support the jobs of around 120,000 apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.
STIMULUS PAYMENTS TO HOUSEHOLDS:
$4.8 billion to provide a one-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession card holders. Around half of those that will benefit are pensioners. The payment will be tax free and will not count as income for Social Security, Farm Household Allowance and Veteran payments. There will be one payment per eligible recipient. If a person qualifies for the one-off payment in multiple ways, they will only receive one payment. Payments will be from 31 March 2020 on a progressive basis, with over 90 per cent of payments expected to be made by mid-April.
ATO LENIENCY AND ASSISTANCE
The Government is also offering administrative relief for certain tax obligations, including deferring tax payments up to four months. This is similar to relief provided following the bushfires for taxpayers affected by the coronavirus, on a case-by-case basis.
Additionally, the ATO is setting up a temporary shop front in some cities within the next few weeks with dedicated staff specialising in assisting small business and is currently considering further temporary ‘shop fronts’ and face-to-face options.
Sourced from Government Media Release dated 12 March 2020
116 views0 comments