Economic Stimulus Package - Part One
Economic stimulus package announced, effective 12 March 2020
As you may have heard, the Government has announced a $17.6 billion economic stimulus package to support the Australian economy and households
The package has four parts:
A Tax-Free assistance for businesses:
Cash Payment, up to $25,000
Businesses with a turnover of less than $50 million that employ staff (between 1 January 2020 and 30 June 2020) will be able to receive a payment from $2,000 up to $25,000.
The payment will be tax free and businesses will receive payments of 50 per cent of the amount withheld on employees’ wages in their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.
Monthly BAS lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements, with a 150 per cent calculation in the March activity statement to provide the same treatment as quarterly lodgers.
Apprentice Wage Subsidy
Eligible employers can also apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.
B Asset write offs and Depreciation
Up to 30 June 2020:
Increasing the instant asset write off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. Eligible assets include second-hand assets.
Up to 30 June 2021:
Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase. The balance of the asset cost would be depreciated as usual. Only new assets are eligible.
C Stimulus payments to households to support growth:
Providing a one-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession card holders.
D Assistance for severely affected regions:
$1 billion to support those sectors, regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.
To implement the stimulus plan, a package of Bills will be introduced into Parliament in the final Autumn sitting week in March 2020 for Parliament’s urgent consideration and passage.
The ATO is implementing some useful measures to assist businesses experiencing financial difficulty as a result of the COVID-19 outbreak.
Options available to assist businesses impacted by COVID-19 include:
Deferring payments for up to four months through BASs, including PAYG instalments, income tax assessments, fringe benefits tax assessments and excise.
Allowing businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to.
Allowing businesses to vary PAYG instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.
Remitting interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities.
Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter low interest payment plans.
Businesses affected will need to contact the ATO for assistance.
If you are impacted by COVID-19, Warnocks would be pleased to contact the ATO on your behalf. You could also contact the ATO to request assistance on the Emergency Support Infoline 1800 806 218, when you are ready, to discuss your situation.