On 12th March 2020, the Federal Government outlined (the first?) stimulus package worth $17.6 billion which is to be put in place to boost the economy in response to the Coronavirus crisis.
Your company may benefit from the business-related provisions of this package as outlined below.
Support for Business Investment
1. Increasing the Instant Asset Write-off
• Threshold increased from $30,000 to $150,000 for businesses with turnovers of less than $500 million
• This $150,000 threshold applies per asset, meaning eligible businesses can instantly write off multiple assets
• This applies for eligible new or second-hand assets purchased before 30 June 2020
2. Investment Incentive – Tax Deduction
• This concession will provide a tax deduction of 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost
• This measure will apply for approximately 15 months and will apply to eligible new depreciating assets acquired from 12 March 2020 and first used or installed by 30 June 2021
Cash Flow Assistance for Businesses
1. Cash Payments of up to $25,000
• Up to $25,000 cash payment from ATO / Gov for employers with $50,000 or more in annual PAYG withholding. The payment reduces by 50 cents for every dollar less than $50k in PAYG withholding. Example if you have staff and total PAYG withholding is $25,000 for the 6 months test period then your business payment would be $12,500. Timing of credit from ATO depends on your BAS IAS cycle but is instant. Employers that pay wages but are under PAYG withholding thresholds will get $2000.
• The test period for these cash payments is 1 January 2020 to 30 June 2020.
2. Apprentices and Trainees Wage Subsidies
• Eligible employers can apply for 50% wage subsidy of the apprentice’s or trainee’s wage paid during the 9 months from 1 January to 30 September 2020
• A maximum of $21,000 per eligible apprentice/trainee per year (i.e $7,000 per quarter)
• Eligible SMEs are those employing fewer than 20 full-time employees who retain an apprentice/trainee
• Apprentice/trainee must be in training as at 1 March 2020
Assistance for Severely Affected Regions
1. $1 Billion Allocated
• An initial $1 billion has been allocated to support these sectors, such as tourism, agriculture and education
• These funds will be provided through existing or newly established Government programs
2. ATO Administrative Relief
• Administrative relief for certain tax obligations for taxpayers affected by the Coronavirus outbreak, on a case-by-case basis
The full Federal Government Media Release from 12 March 2020 is available at:
https://www.pm.gov.au/media/economic-stimulus-package
