On 12th March 2020, The Morrison Government has announced a $17.6 billion economic plan to keep Australians in jobs, keep businesses in business and support households and the Australian economy as the world deals with the significant challenges posed by the spread of the coronavirus.
Delivering support for business investment
- $700 million to increase the instant asset write off threshold from $30,000 to $150,000 and expand access to include businesses with an aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. For example, assets that may be able to be immediately written off are a concrete tank for a builder, a tractor for a farming business, and a truck for a delivery business.
- $3.2 billion to back business investment by providing a time-limited 15-month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50 percent of the asset cost in the year of purchase.
These measures start today and will support over 3.5 million businesses (over 99 percent of businesses) employing more than 9.7 million employees or 3 in every 4 workers. The measures are designed to support business sticking with the investment they had planned and encouraging them to bring investment forward to support economic growth over the short term.
Cash flow assistance for businesses
- $6.7 billion to Boost Cash Flow for Employers by up to $25,000 with a minimum payment of $2,000 for eligible small and medium-sized businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax-free. This measure will benefit around 690,000 businesses employing around 7.8 million people. Businesses will receive payments of 50 percent of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.
- $1.3 billion to support small businesses to support the jobs of around 120,000 apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 percent of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Where small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.
Click Here to read the Media Release regarding the latest stimulus package. Contact Expert Tax for your tax-related matters on 0449 952 855 or 1300 869 829.