The Morrison Government has announced yesterday a $17.6 billion economic plan to keep Australians in jobs, keep businesses in business and support households and the Australian economy as the world deals with the significant challenges posed by the spread of the coronavirus.
This massive stimulus package is focused on keeping Australians in work and helping small business stay afloat through what could be a long winter as the world comes to grips with the Coronavirus outbreak.
The details of the stimulus and how it will be delivered are still somewhat vague, however the proposed package which is expected to pass is as follows.
Cash flow assistance for businesses
$6.7 billion to Boost Cash Flow for Employers by up to $25,000 with a minimum payment of $2,000 for eligible small and medium-sized businesses.
The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax free.
This measure will benefit around 690,000 businesses employing around 7.8 million people. Businesses 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
$1.3 billion to support small businesses to support the jobs of around 120,000 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.
Delivering support for business investment
$700 million to increase the instant asset write off threshold from $30,000 to $150,000 and expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
For example, assets that may be able to be immediately written off are a concrete tank for a builder, a tractor for a farming business, and a truck for a delivery business.
$3.2 billion to back business investment by providing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions.
Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase.
Stimulus payments to households to support growth
$4.8 billion to provide a one-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession card holders.
Around half of those that will benefit are pensioners. The 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. If a person qualifies for the one off payment in multiple ways, they will only receive one payment.
The payments are expected to begin after March 31st.
Everything is still in preparation mode so more details further to what is outlined above is limited. Should you have any queries about how this stimulus package effects your, your family or business, contact one of our accountants today.