$17 Billion Coronavirus Stimulus Package
The government has announced a stimulus package targeting different areas of the economy today. In summary
- Eligible businesses that pay salary and wages will receive a “payment” i.e. will be able to reduce the withholding tax paid for employees for March, April, May and June up to maximum of $25,000. The withholding reduction will be up to 50% of each month with a maximum of $25,000 benefit available. For example if you paid wages of $25,000 for March and your withholding on these wages was $5,000, we expect you will only need to pay $2,500 of the PAYGW on the March BAS. In this instance, over the 4 months the benefit to your business would total $10,000. This measure will cost $6.7bn and will happen automatically based on the business activity statements lodged by business.
- To encourage businesses to spend, the instant asset write-off scheme has been updated. From today assets up to $150,000 ex GST (from $30,000) will be fully deductible. Businesses with a turnover up to $500 million (up from $50 million) will be eligible. “Any such purchase from now until 30 June, including a truck, a tractor, a shop fit-out, can be written off immediately” Mr Frydenberg said.
- In addition to this measure there will be an accelerated depreciation deduction over and above what is able to be deducted in the first year and is available up to 30 June 2021. We expect this will mean existing tax depreciation on pooled assets, as well as other taxation depreciation claims will be increased by a further 50% from their existing level.
- A one-off $750 payment will be made to all welfare recipients including pensioners, Commonwealth seniors cards holders, Newstart recipients, plus carers, veterans and people on disability support and family tax benefit recipients on 31st March 2020. These payments will be made from 31 March this year.
- With the aim to keep people in jobs there is also assistance for businesses that employ less than 20 apprentices. A wage subsidy of 50% of apprentice’s and trainee’s wages will be available from 1 January 2020 to 30 September 2020 (up to $7,000 each quarter) in wage assistance.