Last week, in response to the recent Coronavirus (COVID-19) outbreak, the government announced a stimulus package intended to support business and consumer confidence, employment and business continuity. The package will be introduced to Parliament this month for consideration and passage.
The measures to assist businesses are:
1 – Delivering support for business investment
Businesses with turnover of up to $500m (up from $50m) can claim an immediate asset write-off deduction for new and second-hand assets bought and installed by 30 June 2020 costing less than $150,000 (up from $30,000) effective immediately.
For new assets purchased over $150,000, the government is offering businesses with turnover up to $500m a new accelerated diminishing value depreciation rate of 50% effective immediately where the asset is installed by 30 June 2021.
2 – Cashflow assistance for businesses
Small and medium-sized businesses with turnover of less than $50m will receive cash flow support of 50% of the tax withheld from their employees’ wages (up to a maximum payment of $25,000).
For businesses that are not required to withhold tax from their employees’ wages may still be eligible to receive a minimum payment of $2,000.
The cash flow support covers amounts withheld between 1 January 2020 to 30 June 2020 and will be credited to the business ATO client account upon lodgement of the activity statements. This will reduce the payment due on those activity statements.
Eligible employers can also apply for a wage subsidy of 50% of apprentices and trainees’ wages paid 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.
Eligible employers can register for the subsidy from April 2020.
3 – Stimulus payments to households to support growth
A one-off tax-free payment of $750 will be made to social security, veteran and other income support recipients and eligible concession card holders from 31 March 2020 and the payment will be paid automatically to the recipient.
4 – Assistance for severely affected regions
The government has announced they will put aside $1b to provide financial support to communities and regions most affected by the Coronavirus.
For more information, please do not hesitate to contact your TAG advisor.