The Federal Government has announced a $17.6 billion package as part of its economic response to the Coronavirus pandemic.

Below is a summary of the 3 key areas:

1. Delivering support for small business
• Increasing the instant asset write-off
• Offering businesses a time-limited incentive to invest, by accelerating depreciation deductions.

2. Cash flow assistance for small business
• Boosting cash flow for business
• Wage assistance for small business employing apprentices and trainees

3. Stimulus payments to households to support growth
• One-off payment to low income Australians

Delivering support for small business

Increasing the instant asset write-off

Immediately increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding the turnover requirement from $50 million to include businesses with turnover less than $500 million.

Business investment incentive

Immediately offering a time-limited 15 month investment incentive between now and 30 June 2021. Businesses with a turnover of less than $500 million will be able to deduct 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. Learn more

Cash flow assistance for small business

Boosting cash flow for business

Provides up to $25,000 back to small and medium-sized businesses, with a minimum payment of $2,000 for eligible businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff. The payment will be tax free.

Small and medium business entities with aggregated annual turnover under $50 million and that employ workers will be eligible. Eligibility will generally be based on prior year turnover.

• The payment will be delivered by the Australian Taxation Office (ATO) as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.
• Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50 per cent of the amount withheld, up to a maximum payment of $25,000.
• Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax.

This will be applied for a limited number of activity statement lodgements. The ATO will deliver the payment as a credit to the business upon lodgement of their activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.

Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020. Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements. To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (150 per cent) in the March 2020 activity statement. The minimum payment will be applied to the business’ first lodgement. Learn more

Wage assistance for apprentices and trainees

Offering a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for nine months. The subsidy of up to a maximum of $21,000, will be available to businesses employing fewer than 20 full-time employees who retain an apprentice or trainee, or, where a small business is not able to retain an apprentice, the subsidy will be available to a new employer. Learn more

Stimulus payments to households to support growth

One-off stimulus payment

• Provides a one-off $750 payment to social security, veteran and other income support recipients and eligible concession card holders.
• There will be one payment per eligible recipient. For example, if a person qualifies for the one-off payment in multiple ways, they will only receive one payment.
• The payment will be tax free and will not count as income for Social Security, Farm Household Allowance and Veteran payments.
• The one-off payment will be paid from 31 March 2020.

PACKAGE IMPLEMENTATION

The Government will seek to legislate this package as soon as possible, with parliament next sitting on Monday March 23. To that end, a package of Bills will be introduced into Parliament next week for Parliament’s urgent consideration and passage.

Need WR assistance? Read our ‘Employer Responses to COVID-19’ article here.