Economic Stimulus Package
Earlier in March, the Federal Government announced an economic stimulus package aimed at addressing the economic implications from the Coronavirus. The measures announced are summarised as follows:
1. Increasing the instant asset write-off
The immediate asset write-off threshold will be increased from $30,000 to $150,000 (per asset) immediately, until 30 June 2020. Businesses with aggregated turnover of up to $500 million are eligible. The threshold applies on a per asset basis, so businesses can immediately write off multiple assets.
2. Accelerated depreciation deductions
Businesses with aggregated turnover of up to $500 million will be able to claim accelerated depreciation deductions of 50% of the asset cost in the year of purchase, with existing depreciation rules applying to the balance of the asset’s cost. This applies to assets purchased from 12 March 2020 to 30 June 2021, effectively a 15 month period.
3. Cash flow assistance for employers
Employers will receive a cash payment of up to $25,000. This assistance applies to businesses with turnover up to $50 million that employ staff between 1 January 2020 and 30 June 2020. Businesses will receive payments of 50% of the PAYG Withholding tax paid on their activity statements. The payments will be tax free and should be paid within 14 days of lodgement of the relevant activity statements being lodged and paid. The timing of payments in relation to activity statements already lodged for January and February is unclear at this stage.
4. Support for businesses employing apprentices and trainees
Eligible employers that employ apprentices and trainees can apply for a subsidy of 50% of wages paid to apprentices and trainees for the period 1 January 2020 to 30 September 2020. For each apprentice or trainee, the Government will provide up to $7,000 in wage assistance per quarter. The employer eligibility criteria is not completely clear at this stage.
5. Household stimulus payments
A once-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients, as well as eligible concession card holders. The payment will be tax free and will not count towards Centrelink or Veterans Affairs income tests.
6. Assistance for seriously affected regions and communities
Financial support has been pledged to help regions and communities most severely affected by the Coronavirus to recover.
If you have any queries in relation to how the economic stimulus package may apply to your circumstances, please do not hesitate to contact our office. We expect to be in a position to provide more detail in due course.