Australian Government Stimulus COVID-19
In response to the COVID-19 pandemic, the government has announced its plan to implement a $17.6 billion stimulus package to support businesses and boost the economy. The stimulus package will be introduced to Parliament at the next sitting (week commencing Monday, 23 March). We expect the stimulus legislation will be passed, but implementation as announced is not certain. There may be additional detail not currently provided in the announcement for eligibility.
The government has stated that they “will move quickly” with implementation, with expected dates for the support to be available in early April, if all goes ahead.
The measures that are being proposed include:
Any business with an annual turnover of less than $500 million will be entitled to:
- Instant Asset Write-off– will be increased from $30,000 to $150,000 from 12 March 2020 until June 2020.
- Asset investments – a 50% instant deduction for the costs eligible (new) assets upon installation with existing depreciation rules applying to the balance of the asset cost until 30 June 2021.
Any business with an annual turnover of less than $50 million, that employs staff will be entitled to:
- Tax-free payment: a minimum of $2,000, up to a maximum $25,000, tax-free payment that is equal to 50% of PAYG withheld from salaries and wages over six months.
A business that employs apprentices or trainees will be entitled to (they must have less than 20 full-time employees):
- Tax-free payment: a wage subsidy of 50% (up to a maximum of $21,000 per trainee/apprentice) of the apprentice or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020.
Lower income Australians will be entitled to:
- One-off payment: a one-off tax-free payment of $750 to social security, veteran and other income support recipients and eligible concession cardholders.
Regions affected by COVID-19 will be entitled to:
- Initial $1 billion allocation: in support those regions and communities that have been disproportionately affected by the economic impacts of the coronavirus – including those heavily reliant on tourism, agriculture and education.
PKF is watching the developments and will begin to discuss the benefits of the stimulus package with relevant clients if and when it becomes law. If you or your business are concerned about COVID-19 and the effects it is having on your business, please contact a PKF adviser who will be able to offer you support and advice during this uncertain time.