Yesterday the Australian Government announced an economic response package totalling $17.6 billion to help protect the Australian economy from arising implications caused by Coronavirus epidemic. This package is subject to review by the Parliament in the final sitting week in March 2020.
The following is a summary of the economic stimilus package:
|Delivering support for business investment||Increasing the instant asset write-off
Lifting the threshold to $150,000 (from $30,000) and making more businesses eligible to use it
|Immediately until 30 June 2020|
|Backing business investment
Offering businesses a time-limited incentive to invest, by accelerating depreciation deductions
|Immediately until 30 June 2020|
|Cash flow assistance for businesses||Boosting cash flow for employers
Helping small and medium-sized businesses cover the costs of employee wages and salaries (5% of PAYG withheld with a minimum $2,000 payment and up to a cap of $25,000 over 6 months)
|Covers amounts withheld between 1 January and 30 June 2020|
|Supporting apprentices and trainees
Wage assistance to help small businesses to keep their apprentices and trainees
|1 January 2020 to 30 September 2020|
|Stimulus payments to households to support growth||Stimulus payments
One-off payment of $750 to social security, veteran and other income support recipients and eligible concession card holders to support confidence and domestic demand in the economy
|From 31 March 2020|
|Assistance for severely affected regions||Support for Coronavirus-affected regions and communities
Financial support to help regions and communities most affected by the Coronavirus to recover
|As soon as practicable|
Detailed explanation of business assistance offered:
Increasing the Instant Asset Write-Off
The instant asset write-off threshold is to increase from $30,000 to $150,000 which can be accessed by businesses with a turnover of less than $500 million (up from $50 million) until 30 June 2020.
Backing Business Investment
A time limited 15-month investment incentive to be introduced (through to 30 June 2021) to accelerate depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
Boosting Cash Flow for Employers
Businesses with employees with less than 20 employees and a turnover of less than $50 million are eligible for $25,000 cash flow boost.
If you’re reporting wages to the ATO on quarterly basis (quarterly BAS): you will receive a credit towards the PAYGW payable on wages for March and June quarters.
If you’re reporting wages to the ATO on monthly basis (monthly IAS): you will receive a credit towards the PAYGW payable on wages for March, April, May and June monthly. The payment for monthly lodgers will be calculated at three times the rate (150%) in the March 2020 activity statement.
Example for Quarterly BASs:
March quarterly BAS lodged
W1 Wages $10,000
W2 PAYG withholding $5,000
Amount payable: $2,500 and Government credits $2,500
June quarterly BAS lodged
W1 Wages: $100,000
W2 PAYG withholding $35,000
Amount Payable: $17,500 and Government credits $17,500
Supporting Apprentices and Trainees
Small businesses employing fewer than 20 full-time employees, who retain and apprentice or trainee, can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to September 2020. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.
Further information is available at:
- The Department of Education, Skills and Employment website at: dese.gov.au
- Australian Apprenticeships website at: australianapprenticeships.gov.au
A package of Bills will be introduced into Parliament in the final Autumn sitting week in March 2020 for Parliament’s urgent consideration and passage.
If you require further information, please don’t hesitate to contact us on (07) 3174 5010 or email [email protected]