|There has been a lot of press around the health impacts of the Coronavirus.
Obviously there has been fear and uncertainty on the economic front, and the government has appeared to get on the front foot and prime the pump to stimulate the economy.
The government has recently announced some significant measures in response to the economic impact of the Coronavirus outbreak. These measures are quite bold, generous and heavily targeted towards business’s. Although they haven’t received royal assent as yet (ie they aren’t passed as law yet), they are scheduled to be introduced to Parliament next week, and from all the noise it appears that the opposition will support them.
We have taken some time out to write and explain the measures, and any benefits that may flow to you and your business.
1. Increasing the instant asset write-off from $30,000 to $150,000.
From Thursday 12th March 2020, the instant asset write-off threshold has been increased from $30,000 (for businesses with turnover of less than $50 million) to $150,000 (for business with an a turnover of less than $500 million) ONLY UNTIL 30 June 2020
This is a big incentive for businesses to purchase new equipment and receive a full and immediate tax deduction – again this incentive is only available though from now until 30 June 2020.
This measure applies to equipment purchased using finance.
2. Accelerated Depreciation
Depreciation deductions for equipment purchased which fall outside the instant asset write off will receive accelerated depreciation deductions with 50% able to be claimed upfront and the remainder at existing depreciation rates.
3. Cashflow assistance
This measure will provide a once-off payment of between $2,000 and $25,000, to business owners who have employees and turnover less than $50 million . This payment will be tax-free.
The government is tying the payments to the amounts that are spent on wages tax by the employer. Business’s will get a payment equal to 50% of the PAYG withholding amount payable on the BAS.
The payment will be delivered by the Australian Taxation Office (ATO) as a credit via your April Business Activity Statement (BAS) – if you lodge a monthly activity statement you will get 3 times the amount for the March quarter to make up for the two previous months.
This benefit will effectively apply to tax withheld on wages paid during the period from 1 January 2020 to 30 June 2020. The total credit available will be capped at $25,000.
Businesses who have employees though who are not required to withhold tax (such as casual staff earning below the tax-free threshold) will receive a minimum payment of $2,000.
5. Apprentices & Trainees
Employers with less than 20 full-time employees – and that have an apprentice or trainee who was employed by them and in training as at 1 March 2020 – may be entitled to apply for Government funded wage subsidies. The subsidies amount to 50% of their apprentice’s or trainee’s wage for the 9 month period from 1 January 2020 to 30 September 2020. Importantly, where a business is not able to retain an apprentice or trainee, the subsidy will be available to a new employer that employs that apprentice.
Employers will be reimbursed up to $21,000 ($7,000 per quarter) and payments will be administered made by the National Apprentice Employment Network. It is proposed that employers will be able to register for the subsidy from early April 2020.
6. Stimulus payments to households
The government will provide a once-off $750 payment to social security, veteran and other income support recipients and eligible concession cardholders. To be eligible, you must be residing in Australia and be receiving one of the following payments, or hold one of the following concession cards, as at 12 March 2020:
- Age Pension
- Disability Support Pension
- Carer Payment
- Parenting Payment
- Wife Pension
- Widow B Pension
- ABSTUDY (Living Allowance)
- Bereavement Allowance
- Newstart Allowance
- Youth Allowance
- Partner Allowance
- Sickness Allowance
- Special Benefit
- Widow Allowance
- Family Tax Benefit, including Double Orphan
- Carer Allowance
- Pensioner Concession Cardholders
- Commonwealth Seniors Health Cardholders
- Veteran Service Pension; Veteran Income Support Supplement; Veteran Compensation payments, including lump-sum payments; War Widow(er) Pension; and Veteran Payment.
- Veteran Gold Cardholders
- Farm Household Allowance
Payments will be made automatically from 31 March 2020 by Services Australia or the Department of Veteran’s Affairs.
7. Assistance to regions
The government has also committed to set aside $1 billion to assist specific regions who have been disproportionally affected by the economic impacts of the Coronavirus, including those regions heavily reliant on industries such as tourism, agriculture, and education.
This measure will also include the waiver of the Environmental Management Charge for tourism businesses who operate in the Great Barrier Reef Marine Park and the waiver of entry fees for Commonwealth National Parks.