Coronavirus – Economic response from the Australian Government Proposed Economic response from the Australian Government (Stimulus Package)
The Government’s economic response addresses the economic impacts of the Coronavirus outbreak. It is intended to support confidence, employment and business continuity. It is designed to support business investment, help small businesses manage short-term cash flow challenges, provide targeted support to individuals and assistance to the most severely affected communities and regions.
The government has proposed a $17.6 billion package representing fiscal support in the national interest to guard against more severe economic impacts of the Coronavirus outbreak.
Summary of the Economic Response (Proposal – not legislated yet):
1. Delivering support for business investment
a) Increasing the instant asset write-off
From 12 March 2020, the Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
b) Backing business investment
The Government is introducing a time limited 15-month investment incentive (12 March 2020 through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions for assets greater than $150,000. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
2. Cash flow assistance for businesses
a) Boosting cash flow for employers
The Boosting Cash Flow for Employers measure will provide up to $25,000 back to businesses with a turnover of less than $50 million, with a minimum payment of $2,000 for eligible businesses. This will be calculated at 50 percent of PAYG Withheld.
The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff. The payment will be tax free. This assistance covers amounts withheld between 1 January 2020 through to 30 June 2020. The payment will be delivered by the Australian Taxation Office (ATO) as a credit in the March activity statement upon businesses lodging eligible upcoming activity statements. Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020. Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgments. To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (150 per cent) in the March 2020 activity statement. The minimum payment will be applied to the business’ first lodgment.