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Federal Government unveils coronavirus stimulus package

The Federal Government has announced today a $17.6 billion economic stimulus package, in a bid to keep Australians in jobs, as the economy will likely be severely impacted by the coronavirus. 

 

The economic stimulus package has various announcement, but focussed on four main parts:


Supporting business investment

  • To encourage spending on equipment and other investments, the Government will extend the instant asset write-off concession from $30,000 to $150,000 per asset.
  • Access to this concession will also be expanded to include businesses with aggregated annual turnover of less than $500 million (up from the current annual turnover threshold of $50 million) until 30 June 2020.  This measure will start today.
  •  To encourage business investment, the Government announced a time limited 15 month investment incentive (through to 30 June 2021).
  • This proposal is to provide accelerating depreciation deductions to businesses with a turnover of less than $500 million, and will allow these businesses to deduct an additional 50 per cent of the asset cost in the year of purchase.  This measure will also start today.

 


Providing cash flow assistance to help small and medium sized business

  • Eligible small and medium-sized businesses (with a turnover of less than $50 million) that employ staff could receive a "cash flow boost" of up to $25,000 (with a minimum payment of $2,000), between 1 January 2020 and 30 June 2020.  This payment will be tax free.
  • The Government announced this cash flow boost will be delivered to eligible businesses which will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.
  •  Predicting that financial pressures on businesses may put apprentice jobs at risk, the Government announced a scheme for eligible small businesses that withhold tax for the Australian Tax Office on apprentice's or trainee's wages. 
  • Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice's or trainee's wage for up to 9 months from 1 January 2020 to 30 September 2020.
  • Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.

 

 


 

Household stimulus payments

  • A one-off $750 stimulus payment will be provided to pensioners, social security, veteran and other income support recipients and eligible concession card holders.
  • This payment will be tax free and will not count as income for Social Security, Farm Household Allowance and Veteran payments.
  • There will be one payment per eligible recipient, and where a person qualifies for the one off payment in multiple ways, they will only receive one payment.
  • Payments will be from 31 March 2020 on a progressive basis, with over 90 per cent of payments expected to be made by mid-April.

 


Targeted support for the most severely affected sectors, regions and communities

  • The Government announced that $1 billion has been made available to support those sectors, 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.
  • This will include the waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks.
  • It will also include additional assistance to help businesses identify alternative export markets or supply chains.
  • Targeted measures will also be developed to further promote domestic tourism.

 


The Government is also offering administrative relief for certain tax obligations, including deferring tax payments up to four months.  This is similar to relief provided following the bushfires for taxpayers affected by the coronavirus, on a case-by-case basis.

 

We anticipate that more specific detail will become available shortly, given the announcement was only made today and initial information has been limited.