Government announces stimulus package in response to the Coronavirus
The Government on 12 March 2020 announced a $17.6 billion economic stimulus package.
The government’s goal with the stimulus package is to protect the economy and to maintain confidence by supporting investment and keeping people in their jobs.
It is expected the government will introduce the appropriate Bills into parliament and will provide further detail in relation to the individual stimulus measures.
The Tax Measures announced will apply from Thursday 12 March 2020 are as follows;-
- Instant asset write-off threshold increased from $30,000 (for businesses with an aggregated turnover of less than $50 million) to $150,000 (for businesses with an aggregated turnover of less than $500 million) until 30 June 2020.
- A 15-month investment incentive (available up to 30 June 2021) will operate to accelerate certain depreciation deductions. This measure will also apply to businesses with a turnover of less than $500 million, and these businesses will be able to immediately deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. This measure is proposed to only apply to new depreciating assets first used, or installed ready for use, by 30 June 2021.
The government will also provide Tax-free payments of up to $25,000 for eligible small and medium businesses (those with a turnover of less than $50 million that employ staff) based on their PAYG withholding obligations.
There will also be Tax-free payments of $750 to social security, veteran and other income support recipients and eligible concession card holders. It is estimated that about half of those who will benefit will be pensioners. These payments will commence to be paid from 31 March 2020.
The ATO will provide Administrative relief from tax obligations topeople affected by the
Coronavirus outbreak. This will be on a case-by-case basis.
In addition to these key tax measures, the Government has also announced additional economic
stimulus measures including:
Wage subsidies towards the retention of apprentices and trainees – Employers with less
than 20 full-time employees may be entitled to apply for Government funded wage subsidies
amounting to 50% of an apprentice’s or trainee’s wage for up to nine months from 1 January
2020 to 30 September 2020. The maximum subsidy for each apprentice/trainee is $21,000.
Importantly, where an employer is not able to retain an apprentice, the subsidy will be available
new employersthat employ that apprentice. Employers should be able to register for the subsidy from early-April 2020.
Assistance to affected regions – The Government has also committed $1 billion to support 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. This measure includes waiving fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and the waiver of entry fees for Commonwealth National Parks. Further targeted measures to further promote domestic tourism will be announced.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.