The federal government today announced an economic stimulus package to help fend off a coronavirus-induced recession.
The package will cost around $17 billion. It is anticipated that measure will benefit around 690,000 businesses employing around 7.8 million people.
For our small and medium business clients, the package includes a number of measures to boost cash flow, specifically:
- The instant asset write-off scheme will be expanded. Presently under the scheme, businesses with turnovers of up to $50 million can instantly write off assets valued at up to $30,000, until 1st of July 2020. From today, this is expected to be available to businesses of up to $500 million turnover and the asset value which can be written off will increase to $150,000.
- Businesses with a turnover of less than $50 million that employ staff between 1 January 2020 and 30 June 2020 may be eligible for a tax free cash flow boost of up to $25,000. Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50% of the amount withheld, up to a maximum payment of $25,000.
- Eligible businesses that pay salary and wages but are not required to withhold tax will receive a minimum payment of $2,000.
- For those employing apprentices and trainees, the package offers up to $7000 each quarter for three quarters in wage assistance for each apprentice to incentivise small businesses to retain their existing apprentices and trainees, or re-employ apprentices and trainees who lose their positions from a small business because of the coronavirus downturn. Where a small business can’t afford to hold on to an apprentice, the subsidy will be available to a new employer.
With the ASX falling significantly over the recent weeks, the stimulus package is also expected to include one-off payments worth several hundred dollars each for pensioners and Newstart recipients.
