Businesses, both big and small, are set to receive a boost thanks to the widely anticipated $17.6 billion stimulus package announced by the government on March 12, 2020.
As the economy takes a large hit from the spread of coronavirus, the package will include tax relief for small business, one-off cash payments for welfare recipients and money to help keep apprentices in work.
Cashflow assistance for Business:
Companies that employ staff and have an annual turnover of less than $50 million will be eligible for cashflow assistance between January 1, 2020 and June 30, 2020. Eligible businesses will be able to access a tax-free payment between $2,000 and $25,000. Under the plan, businesses that pay salaries and employee wages can receive a minimum of $2000, even those that aren’t required to withhold tax.
Instant Asset Write-off Extended:
Medium and big businesses will be encouraged to increase spending on assets through an extension of the instant asset write-off in a bid to immediately boost the economy. The government has announced an increase of the instant asset write off threshold from $30,000 to $150,000, and expanded eligibility to businesses with an annual turnover of less than $500 million (currently $50m).
The government will provide $3.2 billion to back business investment by providing a time limited 15-month investment incentive (through to 30 June 2021). 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.
Additionally, the government wants to keep apprentices employed. 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.
The package is set to support approximately 117,000 apprentices.
Prime Minister Scott Morrison announced casual workers who have contracted COVID-19, or require isolation, will be eligible for a Newstart welfare payment while out of work. The typical wait time to access the payment will be waived, however, applicants will be required to pass an assets test before receiving payments.
Other announcements include a $2.4 billion health package that will see around 100 Coronavirus clinics established around the country and one-off cash payments for the unemployed and pensioners.
The stimulus package also includes a $1 billion fund to help the tourism sector.