Harris Black | 13 March 2020
On Thursday 12 March, the federal government announced details of a proposed $17 billion stimulus package, which was triggered by the classification of COVID-19 as a global pandemic.
The package is to support businesses throughout the current economic climate and has been marketed as a measure to protect the economy by maintaining confidence, supporting investment and keeping people in their jobs.
Below is a summary of the incentives that have been announced.
Please note the below incentives are still only proposals and have not yet been legislated. It is expected that the measures will be introduced to Parliament in the final sitting week of March for urgent consideration and passage.
Instant asset write-off threshold
From Thursday 12 March 2020, the instant asset write-off threshold has been increased from $30,000 (for businesses with an aggregated turnover of less than $50 million) to $150,000 (for businesses with an aggregated turnover of less than $500 million) until 30 June 2020.
15-month investment incentive
From Thursday 12 March 2020, businesses with an aggregated turnover of less than $500 million will be able to claim a 50% deduction of the cost of new eligible depreciable assets until 30 June 2021. These include assets which are in excess of the proposed instant asset write-off threshold of $150,000 up to 30 June 2020 and will revert to all assets from 1 July 2020 to 30 June 2021. The incentive does not apply to second-hand depreciable assets or buildings and other capital works.
Tax-free payments – PAYG Withholding
Eligible small and medium businesses (i.e. with a turnover of less than $50 million that employ staff) will be eligible for a tax-free payment of up to $25,000 based on their PAYG withholding obligations.
Tax-free payments – Centrelink recipients
Certain income support recipients and eligible concession card holders will be eligible for a tax-free payment of $750 and will commence to be automatically made from 31 March 2020.
Wage subsidies to support the retention of apprentices and trainees
Employers with less than 20 full-time employees may be entitled to apply for Government funded wage subsidies amounting to 50% of an apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. The maximum subsidy for each apprentice/trainee is $21,000. Employers are expected to be able to register for the subsidy from early-April 2020
Assistance to severely affected regions
The Government has also committed to set aside $1 billion to support regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.
ATO administrative relief
The ATO will provide administrative relief for some tax obligations for people affected by the Coronavirus outbreak, on a case-by-case basis.