Federal Government Stimulus Package – March 2020 Update
Late last week, the Federal Government announced a $17.6 billion economic plan to keep Australians in jobs, keep businesses in business and support households and the Australian economy as the world deals with the significant challenges posed by the spread of the coronavirus.
Important to note that this is yet to be legislated, however there are four parts to this plan and they are listed below:
- Business investment
- Increase and extension of the instant asset write-off from $30k to $150k until 30 June 2020. This is available to businesses turning over up to $500 million. That means that anyone turning over under $500 million can claim a 100% deduction for assets acquired up to $150k until 30 June 2020. Please note this instant asset threshold reverts to $1000 as at 1 July 2020 (we will see if that reversion actually eventuates!)
- Accelerated depreciation deductions for assets over the threshold. A 50% up front deduction for assets acquired over $150k, as long as turnover is less than $500m.
- Cash flow assistance for small and medium sized business
- Tax-free payments up to $25,000 for employers. This will occur when an entity lodges their activity statements for the 6 months to June 2020. If your business turns over less than $50 million and employs workers, then this is for you. The payments will be received as a credit against your activity statements as lodged from 28 April 2020. The payment will calculated as 50% of the PAYG-W you’re required to pay on the relevant activity statements for your employees. Highly recommend to lodge these activity statements on time to receive this benefit.
- Wage subsidy of up to 50% of an apprentice or trainee wage
- Targeted support for severely affected sectors, regions and communities
- Household stimulus payments to drive cash into the economy
- Tax-free $750 payment to social welfare recipients
A detailed download of proposed stimulus package details can be accessed here
FOR SOLE TRADER & NON EMPLOYING ENTITIES
While this is a generous stimulus package for many, there is a vast segment of Australian small business that has been largely overlooked. Many sole traders and non-employing businesses have seen a significant reduction in, and loss of booked work in recent weeks due to the impact of Corona Virus. Industries such as the arts, tourism, education, and the festival circuit have been significantly impacted.
To assist those impacted, our friends at the Freelance Jungle thoughtfully comprised a petition including 13 actionable items for the Australian Government to consider, to better assist 62% of small business in this country, both now and long term. If this resonates, you may consider taking the time to READ, SIGN + SHARE this petition. Linked here.
The ATO have also implemented measures to assist small business to better navigate these current and unforeseen circumstances. The ATO are offering a range of support measures, and details can be accessed here.
A very brief overview of how the ATO are assisting is listed below:
- Payment deferrals
- Monthly GST credits, increased from quarterly
- Ability to review PAYG instalments
- Ability to claim refunds for instalments made Sept 2019 and Dec 2019 quarters
- Remitting interest and penalties that are applied to tax liabilities incurred after 23 January 2020
- Low interest payment plans are available
- Generally supporting your wellbeing. If you feel overwhelmed, please contact Holly at Oceans or the ATO directly so we can work together to find a solution. It’s never too late to contact and ask for help.
If you’d like to better understand how these measures may be of benefit to your business, please do reach out and organise a time to chat, either via email or online bookings here.
Team at Oceans