This morning Scott Morrison announced a $17.6 billion economic stimulus package to provide relief to businesses and household from the threats that they are facing from the Coronavirus outbreak.
KEY TAKE OUTS:
- Welfare Recipients
- Small Businesses with apprentices
- Small – Medium Businesses
- Businesses generally
- Severely Affected Regions
Who gets what in the Stimulus package?
- $750.00 cash payment to welfare recipients – including those on Newstart, disability pension, carers’ allowance, youth allowance, family tax benefits, senior health card-holders, aged pensioners & veterans support payments.
- Small businesses who employ less than 20 employees will be able to apply for a wage subsidy of up to $21,000.00. These payments are based on apprentice/trainee wages for the period 1/1/20 – 30/9/20 with the subsidy to be claimed on their Business Activity Statement up to the value of $7,000.00 per quarter.
- Small – Medium Businesses with a turnover of up to $50 million that employ staff in the period of 1/1/20-30/6/20 will be eligible for a tax free grant of up to $25,000.00. This grant will be issued automatically by the ATO based on 50% of the amount withheld on the employee wage (W2) section of your Business Activity Statement/Installment Activity Statement lodged for the period March 2020 – June 2020.
- Small – Medium Businesses – an increase of the Instant Asset Write-off (currently at $30,000.00) to $150,000.00. The turnover eligibility has also been raised to $500 million (currently $50 million).
- 50% Asset Deduction available to businesses with a turnover of less than $500 million. An extra depreciation discount is being introduced to encourage investment. Eligible taxpayers will receive a deduction of 50% of the cost of the eligible asset (current depreciation rules apply to the balance). This investment incentive will apply until 30 June 2021.
- A $1 billion community fund has been set up to provide assistance to industries in regions severely affected by the economic impact of the Coronavirus. These industries will include tourism, agriculture and education. The fund is looking to boost domestic tourism.
- The Government is also looking at offering administrative relief for certain tax obligations including deferring tax payments for up to four months.
What is the timeline for the relief incentives?
- Welfare payments will start to be paid from 31 March 2020 with all payments expected to be made by mid-April.
- Wage Assistance for Apprentices/Trainees will run from 1 January 2020 – 30 September 2020
- Business grant will be issued based on the lodgement of BAS/IAS between March 2020 – June 2020.
- Instant Asset Write-Off & 50% Asset Deduction starts today (pending passing legislation).
- $1 billion community fund is expected to be introduced into parliament later this month (subject to being passed by parliament).
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