Government’s 1st Stimulus Package Announced

Earlier today the government announced a $17.6 billion stimulus package in an attempt to deal with the impact of coronavirus on the Australian economy.

Please note the below measures are subject to the relevant legislation passing through parliament. At this stage, parliament is not scheduled to resume until the 23rd of March.

What’s in it for your business?

Increased instant asset write off for businesses:
  • The threshold has been increased from $30K to $150K per asset (multiple assets can be purchased).
  • This applies to new or second hand assets first used or installed ready for use from the announcement until 30 June 2020.
  • Eligible businesses are those with aggregated annual turnover of less than $500m (up from $50m). 
Accelerated depreciation deductions are available for businesses:
  • Allowing businesses to deduct 50% of the cost of a new asset on installation, with normal depreciation rules applying to the balance of the cost.
  • On new assets (eligible for depreciation under Division 40) acquired after the announcement and that are first used or installed for use by 30 June 2021. 
  • This does not apply to second hand assets; or buildings or capital works depreciable under Division 43.
  • For businesses with aggregated annual turnover of less than $500m.
A boost to business cash flow:
  • Eligible businesses that withhold tax on their employees’ wages will receive a payment equal to 50% of the amount withheld, up to a maximum payment of $25k (across all lodgments).
  • The payment is delivered as a credit in the ATO activity statement system from 28 April 2020 upon lodging eligible upcoming activity statements.
  • This applies to a limited number of activity statement lodgments:
    • Quarterly lodgers will be eligible to receive the payment for the March and June 2020 quarters;
    • Monthly lodgers will be eligible to receive the payment for the March, April, May and June 2020 lodgments.  Note that, to provide an equivalent benefit as that received by quarterly lodgers, monthly lodgers payment for the March activity statement will be calculated at a rate of three times (150%).
  • Where the payment results in a refund, the ATO will deliver this within 14 days.
  • The minimum payment will be applied to the first lodgment.
  • The payment will be tax free.
Supporting employers in employing apprentices and trainees:
  • Eligible employers 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 30 September 2020.
  • Employers will be reimbursed up to a maximum of $21k per eligible apprentice or trainee ($7k per quarter).
  • Available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee.
  • The apprentice or trainee must have been in training with a small business as at 1 March 2020.
  • Acccess to the subsidy will be available after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider.
  • Employers can register for the subsidy from early-April 2020. Final claims for payment must be lodged by 31 December 2020.
What’s in it for you?

A stimulus payment:
  • a one-off $750 payment per eligible person.
  • The payment will be tax exempt and will not count as income for Social Security, Farm Household Allowance and Veteran payments.
  • To be eligible you must be residing in Australia and be receiving one of a number of government payments or hold certain concession cards on 12 March 2020.
  • The amount will automatically be paid from 31 March 2020 by Services Australia or the Department of Veterans’ Affairs.
What’s in it for affected regions?

Support for affected areas:
  • The Government has set aside an initial $1 billion allocation to support those regions and communities that have been disproportionately affected by the economic impacts of Coronavirus.
  • This will include the waiver of the Environmental Management Charge for tourism businesses that operate in the Great Barrier Reef Marine Park and the waiver of entry fees for Commonwealth National Parks.
  • It will also include additional assistance to help businesses identify alternative export markets or supply chains.
  • Targeted measures will also be developed to further promote domestic tourism.
ATO administrative relief:
  • The ATO will provide administrative relief for certain tax obligations (similar to relief provided following the bushfires) for taxpayers affected by the Coronavirus outbreak, on a case-by-case basis.
  • The ATO will set up a temporary shop front in Cairns within the next few weeks with dedicated staff specialising in assisting small business.
  • They will also consider ways to enhance its presence in other significantly affected regions to make it easier for people to apply for relief, including considering further temporary shop fronts and face-to-face options.