The Federal Government has announced a $17.6 billion economic stimulus package in a bid to keep Australians in jobs as the economy takes a hit from the spread of coronavirus.
The stimulus package is projected to have a $22.9 billion impact to prevent Australia from slipping into a recession.
The temporary and targeted package includes an accelerated depreciation scheme, a cashflow boost of up to $25,000 for small and medium sized businesses, and wage assistance for apprentices and trainees.
Nearly 700,000 small to medium businesses employing 7.8 million people will be able to get cash payments of between $2,000 and $25,000 to help pay wages or hire extra staff. This is estimated to cost $6.7 billion. This payment will be automatically made to those eligible small businesses from 1 April 2020 and with the entitlement calculated as 50% of the PAYG withholding remitted on your activity statements from March to June 2020. This payment will be tax free. Payment will be made within 14 days of lodging your activity statement.
The stimulus package also includes $1.3 billion in support payments to keep apprentices in their jobs to minimise the effect on employment.
The Government is supporting small business to retain their apprentices and trainees. 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. This measure will support up to 70,000 small businesses, employing around 117,000 apprentices.
Casual workers who contract COVID-19 or have to isolate will be eligible for a Newstart welfare payment whilst out of work.
Businesses will be able to access the expanded instant asset write-off from today. Currently small businesses with an annual turnover of less than $50 million can claim tax deductions of up to $30,000 for things like vehicles, tools and office equipment. But the increases will now apply to much bigger businesses with a turnover of up to $500 million and for much bigger items worth up to $150,000, this will be immediate and until the 30 June 2020.
In addition, there is also a 15 month investment incentive to 30 June 2021 which enables businesses with a turnover of less than $500 million to deduct an additional 50% of the asset cost in the year of purchase. This is in addition to any other deprecation deduction.
More than 6 million welfare recipients will receive government assistance with a one off payment of $750 from March 31. Almost half of welfare recipients are pensioners, with other welfare recipients being veterans, carers, families, jobseekers, young people. These payments will occur automatically.
$1 billion is provided to support severely affected regions and communities 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 the waiver of entry fees for Commonwealth National Parks. Plus identification of alternative markets or supply chains. Targeted measures will also be developed to further promote domestic tourism.
If you would like to discuss how these impact your business please contact us.