Today the government announced their Coronavirus Stimulus Package totalling $17.6 billion. The stimulus package aims to protect the economy, assist businesses and help employees maintain job security.
Some details of the Government Stimulus Package include:
The Instant asset write off threshold increased today from $30,000 to $150,000. Eligible business that can access the concession have been expanded to include businesses with aggregated annual turnover of less than $500 million until 30 June 2020.
We note that the instant asset write off threshold is due to revert to $1,000 for small businesses (turnover of less than $10 million) from 1 July 2020.
Where an asset is not eligible for the instant asset write off there are accelerated depreciation measures for businesses with a turnover of less than $500 million. A deduction of 50% of the cost of an eligible asset on installation can now be applied. The balance of the cost of the asset can be further depreciated in accordance with the existing depreciating rules (i.e. the balance depreciated over the remainder of the effect life of the asset). This will apply from March 2020 to June 2021.
Cash flow assistance
- Small and medium sized businesses that have employees will be eligible for government cash flow assistance where their turnover is under $50 million.
These eligible businesses will receive a tax-free payment equal to 50 per cent of the amount withheld to the ATO for tax on their employees’ salary and wages, up to a maximum of $25,000. The payment will be delivered as a credit in the businesses Australian Tax Office (ATO) Integrated Client Account upon lodgement of their Activity Statements. This concession will be done automatically in the system and no additional forms are required.
The cash flow assistance is for the period 1 January 2020 to 30 June 2020. Quarterly Business Activity Statements lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020 and Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements. Monthly lodgers will receive three times the rate (150 per cent) in the March 2020 Activity Statement to make up for the already lodged January 2020 and February 2020 Activity Statements and to provide similar treatment to quarterly lodgers.
Businesses who are eligible (i.e. who meet the turnover test and employ workers) and who are not required to withhold tax on employees’ wages will be eligible for a one-off tax-free payment of $2,000. This will be applied as a credit to the businesses ATO Integrated Client Account upon the business’ first activity statement lodgement.
- Eligible employers can apply for a wage subsidy of 50% of their apprentice or trainee’s wages for up to 9 months from 1 January 2020 to 30 September 2020. An employer will receive up to $21,000 ($7,000 per quarter) of subsidy’s per apprentice or trainee. An eligible employer has been defined as less than 20 employees and can register for the subsidy early April 2020. The apprentice or trainee must have been training with a small business as at 1 March 2020.
- There will be a one-off payment of $750 to social security, veteran and other income support recipients. This includes pensioners and all recipients of Newstart allowance, disability support payments, carers allowance, youth allowance, veterans support, family tax benefit and health care card holders will be eligible. The payment will be tax free and not count as income for social security, farm household allowance and veteran payments and will begin to be rolled out from 31 March 2020. To be eligible you must be residing in Australia and receive one of the above-mentioned social security payments or hold an eligible concession card on 12 March 2020.
If you would like to discuss how the Coronavirus Stimulus Package could benefit you please contact our office 03 9629 1433.