COVID-19 Stimulus Package 1

by | Mar 13, 2020 | COVID19, News & Events, Stimulus

 

What the Australian government’s $17 billion Coronavirus stimulus package means for you.

The federal government has announced a $17.6 billion economic stimulus package, equivalent to 0.9% of GDP.

The package is “front loaded” to ensure as much money as possible flows into the economy as quickly as possible, with $11 billion of the package to be “out the door” by June 2020.

There are six elements of the stimulus package targeted at different areas of the economy, and the Coalition says it may spend more “if more is needed”.

SO WHO GETS WHAT?

Small Businesses 

The main areas of support relevant to small businesses are:

  • Cash flow payment of up to $25,000 for employers
  • 50 per cent wage subsidy for apprentices and trainees
  • Increase in the instant asset write off threshold to $150,000
  • 50 per cent accelerated depreciation for investments

Cash flow payment for employers

  • Businesses with a turnover of less than $50 million that employ staff between 1 January 2020 and 30 June 2020 may be eligible for a tax free cash flow boost of up to $25,000.  Those that pay income tax on employees’ wages are likely to be eligible for a payment equal to 50 per cent of an employee’s salary, up to $25,000. A minimum payment of $2000 may be available to businesses that pay wages but are not required to pay tax.

 

  • Eligible businesses will automatically receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from 28 April 2020, with refunds to be paid within 14 days.

 

Wage subsidy for apprentices and trainees

  • Eligible employers can apply for a wage subsidy of 50 per cent of an apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. The ABC has reported the government will offer small and medium businesses a subsidy of up to $21,000 per apprentice, equating to $7,000 per quarter for the first three quarters of 2020.

Increase in the instant asset write off threshold

  • The instant asset write off threshold will be increased from $30,000 to $150,000. It will now be applicable to businesses with aggregated annual turnover of less than $500 million (up from $50 million). The higher threshold is in place until 30 June 2020.

Household stimulus payments

  • 6.5 million lower income Australians will receive a one-off $750 payment aimed at boosting domestic demand in the economy, costing the budget $4.76 billion.

 

  • This includes people on the Age Pension, Newstart, the Disability Support Pension, Carers’ Allowance, Youth Allowance, Veterans’ Affairs payments, Family Tax Benefit and those holding a Pensioner Concession Card or Commonwealth Senior Health Card.

 

Tax relief

The ATO will also consider relief for certain tax obligations to eligible businesses, including deferring tax payments up to four months.

If disruption to your business operations causes you to fall behind with your tax and super obligations, you can call or email us and we will work with you to find a solution or head to the ATO website and read the information on the Covid-19.