This morning the Prime Minister, Scott Morrison announced a stimulus package worth $17.6 billion. The package contains measures to boost the economy with a combination of cash payments to individuals who qualify for government benefits and benefits to business.
Currently, these are just announcements with no supporting legislation which means the below could be subject to change and clarification. The administration of some of these incentives is yet to be confirmed.
What do we know so far?
Cash payments to small and medium business
- Businesses with turnover less than $50 million that employ staff will received a tax-free, cash incentive of between $2,000 and $25,000
- These payments will happen automatically through the tax system with no further forms or administration to be completed
- The payments will be based on Business Activity Statements or Instalment Activity Statements lodged from 28 April with the refunds to be paid within 14 days
Instant asset write off
- Threshold for assets which can be written off immediately has been raised from $30,000 to $150,000
- Eligibility for the write off has increased from businesses with turnover up to $50 million to businesses with turnover up to $500 million
- This will be available for assets purchased from today until 30 June 2020
Investment incentive – accelerated depreciation
- Businesses will have access to a 15 month investment incentive through accelerated depreciation deductions
- Businesses with turnover less than $500 million will be able to deduct an additional 50% of the cost of the asset in the year it’s purchased
- This will be available until 30 June 2021
Payments for apprentices
- Eligible businesses will receive a wage subsidy of up to $7,000 per quarter to retain existing apprentices and trainees for 9 months (from 1 January 2020 – 30 September 2020)
- Businesses will be eligible where they have fewer than 20 full time workers
- Businesses can register from 2 April 2020 for this scheme
- $750 cash payments to those who qualify for government benefits including Family Tax Benefits, the Aged Pension, Newstart Allowance and the Carer’s Allowance
- Payments should start from 31 March 2020
The Government is hoping that the above incentives will be enough to keep the Australian economy going through this difficult time.
As further information is released, we will provide you with updates.
Should you have any questions in relation to the above, please contact your Holman Hodge adviser.