The Australian Government has announced an economic response to protect the economy by maintaining confidence, supporting investment and keeping people in jobs.
The stimulus has targeted targets four key areas:
1 – Delivering support for business investment
INSTANT ASSET WRITE OFF – From today, the Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
ACCELERATED DEPRECIATION – They are also offering businesses a 15 month investment incentive to support their business, by accelerating depreciation deductions. Key features of the incentive include:
- Deduction of 50 per cent of the cost of an asset, with existing depreciation applying to the balance of the asset’s cost.
- Available to businesses with aggregated turnover below $500 million, purchasing certain new depreciable assets.
2 – Cash flow assistance for employers
SMALL BUSINESS CASHFLOW BOOST – Helping small and medium businesses with aggregated annual turnover under $50 million to cover the costs of employee wages and salaries equal to 50 per cent of PAYG withheld for businesses that withhold tax, with a minimum of $2,000 and a maximum of $25,000 over six months. Businesses that pay salary and wages but are not required to withhold tax will also receive the minimum payment of $2,000. This will be a tax free payment.
APPRENTICES & TRAINEES – 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.
3- Stimulus payments to households to support growth
STIMULUS PAYMENTS – One-off payments of $750 will be paid to around 6.5 million lower-income Australians, including pensioners, other social security and veteran income support recipients and eligible concession card holders.
This one-off payment will be paid from 31 March 2020.
4 – Assistance for severely affected regions
SEVERELY AFFECTED REGIONS – 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 the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education. The $1 billion will be available for distribution through existing or newly established mechanisms as soon as practicable.
ATO RELIEF – The Australian Tax Office (ATO) will also 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 look at ways to enhance its presence in significantly affected regions to make it easier for people to apply for relief.
Current ATO guidance can be found at: https://www.ato.gov.au/Individuals/Dealing-with-disasters/In-detail/Specific-disasters/COVID-19/