The Australian Government has just released 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.
The key tax and stimulus 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.
Cash Flow Assistance
- 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. This is not a cash payment, but it is a credit equal to 50% of the PAYG amounts withheld from salary and wages paid to employees.
Businesses that lodge activity statements on a quarterly basis will be eligible to receive the credit for the quarters ending March 2020 and June 2020. Businesses that lodge on a monthly basis will be eligible for the credit for the March 2020, April 2020, May 2020 and June 2020 lodgements.
If a business pays salary and wages to employees but is not required to withhold any tax, then a minimum payment of $2,000 will still be made. The minimum $2,000 payment will be applied to the first activity statement lodgement.
- 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.
- Tax-free payments of $750 to social security, veteran and other income support recipients and eligible concession cardholders. It is estimated that around half of those who will benefit will be pensioners. These payments will be automatically made from 31 March 2020.
QLD Government offers $500m in loans to support workers in businesses affected by coronavirus
- The Qld Government will create a new $500 million loan facility, interest-free for the first 12 months, to support businesses to keep Queenslanders in work and extend the coronavirus payroll tax deferral to all businesses across the state. Read more
When we have our 2020 Tax Planning meeting with you over the next few weeks, we will assist you with opportunities to restructure how you pay yourself to that you can receive the maximum cashflow assistance amounts from the Government. Contact us TODAY if you would like to meet with us earlier to ensure you receive your maximum cash flow assistance from the Government.
BUSINESS CONTINUITY PLANNING
As a business owner, now is the time to plan for employees being away from your workplace, shortages of supply, reduction in sales and the possibility of your workplace being closed for a short period of time if everyone is being forced to self-quarantine.
Over the next few weeks, we would like to meet with you or have a Zoom Meeting to discuss the following:
- Employees working from home, and workplace obligations
- How do pay your bills in the short term if your sales start to dry up
- How to communicate in a reassuring way with your clients and customers
- How to keep things moving with your business
We’re not suggesting in any way that we have all the answers, but it is important for us to work with you and help you and plan for what will happen in the weeks and months ahead.
Contact us TODAY to book in a 30-minute online meeting so we can discuss your business situation and make plans to assist you.
IMPORTANT Update your Enduring Power Of Attorney (EPOA) and Will now
If you have to self-quarantine or are admitted to hospital, if you don’t have an EPOA then no-one else can make important business or financial decisions on your behalf. We strongly recommend that you have an up to date EPOA and Will, and that your family know where these are stored.
These are times when we need to stay calm and rely on reliable news sources and information from State and Australian Government websites. What you see on social media may be panicky and unreliable information – stay away from this!