Today, the Prime Minister Hon Scott Morrison MP and Treasurer Hon Josh Frydenberg MP announced the Commonwealth government’s economic response to the Coronavirus (COVID-19) pandemic. The package totals $17.6bn over the forward estimates and is focused on supporting business and protecting jobs in the Australian economy. The economic stimulus package targets four key areas:
Support for business investment
- Increasing and expanding the instant asset write off –
- The Government will increase the instant asset write off threshold from $30,000 to $150,000 as of today (12th March 2020) until the 30th of June 2020
- The program will be expanded to be used by all businesses with aggregated annual turnover less than $500m (up from $50m) until the 30th of June 2020
- Accelerated Depreciation Deductions –
- The Government will accelerate depreciation deductions, by allowing all businesses with turnover less than $500m to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
Cash flow assistance for businesses
- Boosting cash flow for employers
- Businesses with turnover less than $50m that employ staff will be eligible for a payment up to $25,000.
- This will be delivered by the ATO upon lodgement of monthly or quarterly activity statements depending upon the businesses reporting frequency:
- Quarterly:
- Quarter 3 – January 2020 to March 2020
- Quarter 4 – April 2020 to June 2020
- Monthly:
- March 2020*
- April 2020
- May 2020
- June 2020
- Quarterly:
- How is it calculated:
- Businesses that employ individuals will be entitled to a minimum payment of $2,000 even if they don’t withhold any wages tax
- The payment will be tax free
- The payment is calculated as 50% of wages tax withheld up to a maximum of $25,000
- * To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers for March 2020 monthly BAS’ or IAS’ will be calculated at three times the rate (150%) of wages tax.
- How to get it:
- The ATO will automatically calculate the benefit when the BAS or IAS is lodged, and the benefit will be subtracted from the debt, or if a refund is due, it will be paid within 14 days.
- Supporting Apprentices and Trainees
- The government is supporting small business to retain apprentices and trainees with a 50% wage subsidy on apprentice or trainee wages paid from 01/01/2020 to 30/09/2020.
- Where a business does not retain an apprentice, the subsidy is available to a new employer.
- Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter)
- Eligibility:
- It is only eligible to small businesses employing fewer than 20 full-time employees
- The apprentice or trainee must have been in training with a small business as at 1 March 2020
- Employers of any size can access the subsidy, by re-engaging an eligible out-of-trade apprentice or trainee
- How to get it:
- In order to get the subsidy, a business must first be assessed by an Australian Apprenticeship Support Network (AASN) provider
- Employers will be able to register for the subsidy from early-April 2020, with final claims for payment due by 31 December 2020.
- For more information visit:
- Department of Education, Skills and Employment: www.dese.gov.au
- Australian Apprenticeships: www.australianapprenticeships.gov.au
Assistance of households
- Stimulus Payments
- The Australian government will provide a one-off $750 payment to 6.5 million social security, veteran and other income support recipients.
- To be eligible, an individual must be receiving one of the following payments or hold one of the following concession cards on 12 March 2020:
- Age Pension
- Family Tax Benefit, including Double Orphan Pension
- Pensioner Concession Card Holders
- Newstart Allowance
- Youth Allowance
- Disability Support Pension
- Carer Payment
- Parenting Payment
- Wife Pension
- Widow B Pension
- ABSTUDY (Living Allowance)
- Austudy
- Bereavement Allowance
- Sickness Allowance
- Partner Allowance
- Special Benefit
- Widow Allowance
- Carer Allowance
- Commonwealth Seniors Health Card Holders
- Veteran Service Pension
- Veteran Income Support Supplement
- Veteran Compensation Payments (including lump sum payments)
- War Widow(er) Pension
- Veteran Payment
- Veteran Gold Card Holders
- Farm Household Allowance
- How to get the payment:
- The one-off payment will be paid automatically from 31 March 2020 by Services Australia. Over 90% of payments will be made by mid-April 2020.
- If you hold a Commonwealth Seniors Health Card or Veteran Gold Card, the department will contact you to confirm your account details, so the payment can be made.
Assistance for severely affected regions
- Support for Coronavirus-affected regions and communities:
- The government has set aside $1 billion to support regions and communities that have been disproportionately affected by the economic impacts of the coronavirus, particularly those in industries of tourism, agriculture and education.
- Government will also seek to provide additional assistance to business to assist business in identifying alternative export markets or supply chains.
- The $1 billion will be provided through existing or newly established Government programs with the Minister for Trade, Tourism and Investment working with industries and communities to determine how the money will be spent.
- ATO administrative relief
- The ATO will provide administrative relief for certain tax obligations (similar to those provided during the bushfires) to taxpayers affected by the Coronavirus outbreak on a case by case basis.
For more information about the Economic Response to the Coronavirus, please visit www.treasury.gov.au/coronavirus