Economic Stimulus Measures for Business - Renee Ballinger
24 March 2020
In response to the Coronavirus (COVID-19) pandemic, the Australian Government have released a second economic stimulus package, which has been marketed as a measure to protect the economy by maintaining confidence, supporting investment and keeping people in their jobs. While we wait for these tax and stimulus measures to be legislated and for further details to be revealed, key announcements so far include cashflow assistance to small and medium business, delivered by way of tax-free amounts of up to a maximum of $100,000 based on their PAYG withholding obligations. This will be a credit equal to 100% of the PAYG tax amounts withheld from salary and wages paid to employees in the period from March to September 2020. Even if a business is not required to withhold tax from wages paid to employees, they may still receive a minimum payment of $20,000 over this period. Therefore, it is vital that you continue to lodge your activity statements.
To support the retention of apprentices and trainees, wage subsidies have been announced. 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, with a maximum subsidy for each apprentice/trainee of $21,000 available.
To encourage investment in business assets, the instant asset write-off threshold has been increased from $30,000 to $150,000 per asset from 12 March 2020 until 30 June 2020. Further, the ability for businesses to access these immediate deductions has been expanded, with the threshold increased to include businesses with an aggregated turnover of under $500 million (previously $50 million). In addition to this, there are also expected to be accelerated depreciation deductions available through to 30 June 2021.
The Queensland Government have also announced an Immediate Industry Recovery Package, valued at $27.25 million, which proposes to offer low interest loans (with an initial interest free period) of up to $250,000 to support Queensland businesses impacted by COVID-19 to retain employees and maintain their operations. Additionally, affected businesses may be eligible to apply to defer lodgement and payment of payroll tax.
For further details, or for assistance maximising the cashflow benefits of these stimulus initiatives, call the team at UHY Haines Norton Gladstone today on 4972 1300.