Australian Government's Economic Response to the Coronavirus

You are probably wondering what these measures are, and what they mean for you. Below we will outline the current information available, including who will benefit from the stimulus package and what they will receive.

Contents

1. Delivering Support for business Investment
2. Cash flow assistance for business
3. Stimulus payments to households to support growth
4. Assistance for severely affected regions

1. Delivering Support for business Investment

• Instant asset write-off threshold increased – increased to $150,000
  

  Effective from 12 March 2020, the instant asset write-off threshold has been increased to $150,000 (from $30,000). This is available to businesses with an aggregated annual turnover of less than $500 million (previously $50 million). This measure is available until 30 June 2020.

• Backing business investment – accelerated depreciation
  

  A 15 month investment incentive effective from 12 March 2020 and available to 30 June 2021 to support businesses with a turnover of less than $500 million, allowing accelerated depreciation deductions on eligible assets – 50% can be deducted in the year of installation, with existing depreciation rules being applied to the balance of the asset’s cost – resulting in well over 50% of the cost claimable as a tax deduction in the first year of use.

If you would like to read more in relation to the above, the Treasury have released a fact sheet which can be found here.

2. Cash flow assistance for business

• Boosting cash flow for employers – tax free payment up to $25,000
  

  Effective for wages that are paid from 1 January 2020, businesses with an aggregated annual turnover under $50 million for the 2019FY who employ workers will be automatically eligible for a refund of tax withheld on their employees’ salary and wages.This refund will be a credit on the businesses activity statement (BAS) for the business, being 50% of the tax withheld on wages. The payment will be a minimum refund of $2,000 capped to $25,000. If the credit on the BAS results in a refund position overall for the business (taking into consideration net GST, PAYGW and other fields on the BAS), the ATO will deliver the refund within 14 days.The minimum payment of $2,000 will be included in your March 2020 BAS – this is applicable whether or not 50% of your withholding is below, equal to or above $2,000, as long as your business has employees and you are registered for PAYGW with the ATO. If the wages paid to your employee do not require you to withhold any tax (due to the minimal amount being paid), you will still receive a minimum payment of $2,000.The eligible periods for this measure depends on when you lodge your BAS – these are as follows:    Quarterly lodgers: March 2020 and June 2020 BAS
      Monthly lodgers: March, April, May & June 2020 BASThis means that you will receive a credit for 50% of the tax withheld on wages (the W2 label on your BAS) in each of the BAS’ noted above, until your total credit reaches a total of $25,000.

• Supporting apprentices and trainees – 50% reimbursement up to $21,000 per apprentice/trainee
  

  Effective from 1 January 2020 to 30 September 2020, eligible employers can apply for a wage subsidy of 50% of the apprentice and trainee wages. Eligible employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).If you would like to access this measure, you will need to register for the subsidy from early-April 2020. Application details have not yet been published, however should be in the near future.Eligible employers are those who have fewer than 20 full-time employees, with the apprentice or trainee needing to be in training with the business as at 1 March 2020. Claims must be made by 31 December 2020.

If you would like to read more in relation to the above, the Treasury have released a fact sheet which can be found here.

3. Stimulus payments to households to support growth

• Stimulus payments – tax free payment of $750
  

  A one-off payment of $750 to eligible social security, veteran and other income support recipients and eligible concession card holders will be paid automatically from 31 March 2020. This payment is over and above any payments you currently receive. To be eligible you must be residing in Australia and be receiving one of the eligible payments or hold an eligible concession card on 12 March 2020.Some of the eligible payments or concession card holders include Age Pension, Carer Payments, Austudy, Newstart Allowance, Family Tax Benefit, Carer Allowance, Partner Allowance and Commonwealth Seniors Health Card holders and Farm Household Allowance.Note that this payment will be exempt from taxation and will not count as income for Social Security, Farm Household Allowance and Veteran Payments.

For a full list of eligible payments and concession card holders, the Treasury have released a fact sheet which can be found here.

4. Assistance for severely affected regions

• Support for Coronavirus-affected regions and communities – fee waivers
  

  Support for those regions and communities that have been disproportionately impacted by the economic impacts of the Coronavirus. This includes those who are heavily reliant on industries such as tourism, agriculture and education.This measure includes waivers 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.

• ATO administrative relief – lodgement concessions
  

  Like what we have recently seen with the bushfire crisis in Australia, the Australian Taxation Office (ATO) will provide administrative relief for certain tax obligations for taxpayers that have been affected by the Coronavirus outbreak, on a case-by-case basis. To receive this relief, you will need to apply with the ATO. If you have been affected, please contact our team and we can assist you with this process.

If you would like to read more in relation to the above, the Treasury have released a fact sheet which can be found here.

In summary if you are a small to medium business, have employees, employ apprentices or trainees, receive certain government payments or hold eligible concession cards, this stimulus package is going to benefit you!

We will continue to keep you updated on the measures, including application details once further information has been released.

If you would like to discuss any of these measures and what they mean for you and your business, contact one our trusted team members on (02) 4229 2211 or get in touch with us online.

*The above information was correct at the time of publishing and subject to change*