The Federal government today announced a series of significant measures to help stimulate the economy, in light of the economic impact of the Coronavirus.
The following is a summary of the measures, particularly as they apply to business. These are just proposed measures at this stage, so clients are advised to proceed with caution. Legislation is expected to be introduced into Parliament in the final sitting week in March 2020 (i.e. from 23 March 2020) for urgent consideration and passage.
The Key Tax Measures include:
• From Thursday 12 March 2020 to 30th June 2020, an increase in the instant asset write-off threshold from $30,000 (for businesses with an aggregated turnover of less than $50 million) to $150,000 (for businesses with an aggregated turnover of less than $500 million).
• An investment incentive allowing businesses with a turnover of less than $500 million to accelerate certain depreciation deductions by immediately deducting 50% of the cost of an eligible asset on installation, claiming the rest under the existing depreciation rules. This measure is expected to only apply to new depreciating assets first used, or installed ready for use, by 30 June 2021.
• Tax-free payments of up to $25,000 for eligible small and medium businesses (i.e., with a turnover of less than $50 million) that employ staff based on their PAYG withholding obligations.
• Tax-free payments of $750 to social security, veteran and other income support recipients and eligible concession cardholders. These payments will commence to be automatically made from 31 March 2020.
• Administrative relief from the ATO for some tax obligations for people affected by the Coronavirus outbreak, on a case-by-case basis.
In addition to these key tax measures, the Government has also announced additional economic stimulus measures including:
• Wage subsidies to support the retention of apprentices and trainees – Employers with less than 20 full-time employees may be entitled to apply for Government funded wage subsidies amounting to 50% of an apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. The maximum subsidy for each apprentice/trainee is $21,000. Importantly, where an employer is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice. It is proposed that employers will be able to register for the subsidy from early-April 2020.
• Assistance to severely affected regions – The Government has also committed to set aside $1 billion to support regions and communities that have been severely affected by the economic impacts of the Coronavirus. These measures include the waiver of government fees applicable to tourism businesses.