Details on the Australian Government Stimulus Package (COVID-19)

On 12 March 2020, the Australian Government announced a $17.6bn economic stimulus package in response to the coronavirus (COVID-19) outbreak.

The package is directed at providing support for individuals, businesses and households by addressing 4 key areas:

1. Business investment

The following measures commenced Thursday 12 March 2020 and will support over 3.5m businesses (over 99% of businesses) employing more than 9.7m employees (or 3 in every 4 workers):

• Instant asset write-off extended and increased: The instant asset write-off threshold is increased from $30,000 to $150,000 and access is expanded to include businesses with aggregated annual turnover below $500m (up from $50m) until 30 June 2020. Examples of assets that may be able to be immediately written off include a bobcat or digger for a builder, a tractor for a farming business, and a truck for a delivery business.

• Time-limited 15-month investment incentive: Businesses with turnover of less than $500m will be able to deduct 50% of a new depreciable asset’s cost in the year of purchase (through to 30 June 2021), with existing deprecation rules applying to the balance of the asset’s cost.

2. Cash flow assistance for businesses

• Boost cash flow for employers: Eligible small and medium-sized businesses will receive a tax-free payment of up to $25,000 (with a minimum payment of $2,000). This will provide cash flow assistance to businesses with turnover of less than $50m that employ less than 20 full time staff, between 1 January 2020 and 30 June 2020. Businesses will receive payments of 50% of their PAYG-withholding components of their BAS or IAS from 28 April 2020 with refunds paid within 14 days.

• Apprentice and trainee wage subsidy: Eligible employers can apply for a tax-free wage subsidy of 50% of an apprentice or trainee wage for up to 9 months from 1 January 2020 to 30 September 2020 (capped at $21,000). Where a small business is cannot retain an apprentice, the subsidy is available to a new employer who employs the apprentice.

3. Household stimulus payment

Pensioners, social security, veteran and other income support recipients, and eligible concession card holders, will receive a one-off $750 stimulus payment. The payment will be tax free and not count as income for Social Security, Farm Household Allowance or Veteran payments. Each eligible recipient will receive one payment only. Payments will be made from 31 March 2020 on a progressive basis, with over 90% of payments expected to be made by mid-April 2020.

4. Support for impacted regions

Support of $1bn will be provided for regions or sectors (such as tourism, agriculture and education) that are disproportionately impacted by the economic impacts of the virus. It will also include additional assistance to help businesses identify alternative export markets or supply chains and to further promote domestic tourism.

ATO relief

The ATO will provide administrative relief for certain tax obligations for people affected by coronavirus, on a case-by-case basis.

Measures to assist impacted businesses include:

• deferring the payment due dates of tax amounts by up to 4 months for BAS’ (including PAYG instalments), income tax assessments, FBT assessments and excise;
• allowing businesses on a quarterly reporting cycle to opt into monthly GST reporting to get quicker access to GST refunds;
• allowing businesses to vary PAYG instalment amounts to zero for the April 2020 quarter and claim a refund for any instalments paid in the September 2019 and December 2019 quarters;
• remitting any interest and penalties, incurred on or after 23 January 2020; and
• allowing affected businesses to enter into low-interest payment plans to help them pay existing and ongoing tax liabilities.

Importantly, assistance measures for taxpayers impacted by COVID-19 will not be implemented by the ATO automatically (unlike the relief measures for the 2019-20 bushfires). Anyone impacted by coronavirus should contact the ATO to request assistance on its Emergency Support Infoline at 1800 806 218.

For more information visit: The Australian government’s Economic Response to the Coronavirus, the treasury’s fact sheet containing detailed worked examples, The Prime Minister and Treasurer’s joint media release on 12 March 2020, and the ATO’s website.

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