March 2020 Special Issue Government Assistance in Response to Coronavirus
Yesterday, the federal government proposed a $17.6 billion stimulus package in an attempt to combat the economic affects of the Coronavirus outbreak.
It is expected the Bill will be introduced into Parliament in the final sitting of March 2020 for urgent review and passage as law.
Proposed Key Tax Measures
From 12 March 2020, the Instant Asset Write-Off threshold will be increased from $30,000 to $150,000 for depreciable assets acquired and in use by 30 June 2020. This concession applies to businesses with an annual aggregated turnover of less than $50 million. It is proposed to increase the eligible business turnover threshold to $500 million for this concession.
15 Month Investment Incentive available until 30 June 2021 to accelerate depreciation on certain assets. This proposed concession will apply to businesses with an annual aggregated turnover of less than $500 million. An immediate deduction of 50% of the cost of the eligible asset on installation with normal depreciation rules applying to the balance of the cost. This will only apply to new depreciable assets (not used) and in use by 30 June 2021.
Proposed Tax Free Payments Up to $25,000 for eligible small and medium businesses with an annual aggregated turnover of less than $50 million. Those businesses that employ staff between 1 January 2020 and 30 June 2020 and with PAYG Withholding obligations may be eligible. It is anticipated the payment will be 50% of the employees’ salary up to a maximum combined total of $25,000.
Proposed Tax Free Payments of $750 to social security veterans and other income support recipients and eligible concession card holders. Payments to be automatically made from 31 March 2020. It is expected half of these recipients will be pensioners.
Administrative Relief from the ATO for some tax obligations for those directly affected by Coronavirus. ATO setting up temporary shop fronts in Cairns and dedicated staff dedicated to assisting small business.
Proposed Other Economic Stimulus Measures
Wage Subsidies to Support the Retention of Apprentices and Trainees for employers with less than 20 full time employees. These employers may be able to apply for wage subsidies up to 50% of the apprentice/trainee wages for up to 9 months for the period 1 January 2020 to 30 September 2020. The maximum subsidy per apprentice/trainee being $21,000. This will also apply in the instance where a new employer takes on an apprentice/trainee from an employer that is unable to keep the person on. It is expected employers can register for this subsidy from early April 2020.
Assistance to Severely Affected Regions by setting aside $1 billion to support communities that have been severely/disproportionately affected by the economic impacts of the Coronavirus. In particular those regions heavily reliant on tourism, agriculture and education. Some of these measures include:
Waiver of fees and charges for tourism business operating in the Great Barrier Reef Marine Park and Commonwealth National Parks.
Additional assistance to help businesses identify alternative export markets or supply chains.
Further promotion of domestic tourism.
Remember these incentives are yet to be passed as law.
If you require any further information or assistance, please do not hesitate to contact us.
The AAG Team