The
Australian government has announced a number of measures to stimulate the
economy in the wake of Coronavirus impacts. Following is a summary of the key
measures from the National Tax and Accountants Association.
If
you would like to discuss how the measures may assist you or your business,
please contact our office here.
The
Government has announced its economic response to the Coronavirus in the form
of a $17.6 billion economic stimulus package. The package has been
marketed as a measure to protect the economy by maintaining confidence,
supporting investment and keeping people in their jobs.
It
is expected that an appropriate package of Bills (which will provide further detail
in relation to the proposed measures) will be introduced into Parliament in the
final sitting week in March 2020 (i.e., presumably from 23 March 2020) for
urgent consideration and passage.
The
Key Tax Measures include:
·
From Thursday 12 March 2020, the instant asset write-off
threshold has been increased 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) until 30
June 2020.
·
A time-limited 15-month investment incentive (through to 30
June 2021) which will operate to accelerate certain depreciation
deductions.
This measure will also be available to businesses with a turnover
of less than $500 million, which will be able to immediately deduct 50% of the
cost of an eligible asset on installation, with existing depreciation rules
applying to the balance of the asset’s cost.
As announced, this measure is proposed 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 card
holders. It is estimated that around half of those who will benefit will be
pensioners. 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. Additionally, the ATO is setting up a temporary shop front in Cairns
within the next few weeks with dedicated staff specialising in assisting small
business and is currently considering further temporary ‘shop fronts’ and
face-to-face options.
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 disproportionately affected by the economic impacts
of the Coronavirus, including those heavily reliant on industries such as
tourism, agriculture and education. This will include:
·
– The waiver of fees and charges for tourism businesses that
operate in the Great Barrier Reef Marine Park and the waiver of entry fees for
Commonwealth National Parks.
·
– The provision of additional assistance to help businesses
identify alternative export markets or supply chains.
·
– Further targeted measures to further promote domestic
tourism.
Source: NTAA March 2020
