SME Blog & News

Government's $17.6 Billion Economic Stimulus Package

The Morrison Government has just announced a multi-billion-dollar stimulus package to fire up the economy in response to the coronavirus crisis. The targeted stimulus package is designed to keep Australians in jobs and help small to medium sized businesses to stay in business. Here are the key benefits for our sector.

  

1. Instant asset write-off for businesses with turnovers of less than

 $500 million and eligible assets costing less than $150,000

Businesses with turnovers of less than $500 million will be able to claim an immediate tax deduction for eligible assets costing less than $150,000. Currently the concession is only available to businesses with turnovers of less than $50 million and for eligible assets costing less than $30,000.

Expected to follow the current rules, the immediate tax deduction should be available for all depreciating assets excluding assets expected to be leased out, assets allocated to a low-value asset pool, horticultural plants, software allocated to a software development pool and capital works. The asset must also be purchased and first used (or installed ready-for-use) between 12 March 2020 and 30 June 2020.

 

2. Additional 50% immediate tax deduction for businesses with turnovers of less than $500 million

Businesses with turnovers of less than $500 million will also be able to claim an additional immediate tax deduction of 50% of the cost of assets purchased between 12 March 2020 and 30 June

2021. This is on top of the normal tax depreciation deduction the business would be entitled to (including the instant asset write-off explained above).

 

3. Cash payments of up to $25,000 for eligible small and medium sized businesses

Businesses with turnovers of less than $50 million that employ staff between 1 January 2020 and 30 June 2020 will receive tax-free cash payments of 50% of their Business Activity Statement or Instalment Activity Statement from 28 April 2020.

 

 4. Wage subsidies of 50% of apprentice or trainee wage

Eligible small business employers can apply for a wage subsidy of 50% of their apprentice or trainee wage for up to nine months from 1 January 2020 to 30 September 2020.

 

5. Assistance for severely-affected businesses

The Government has also announced assistance to support those sectors, regions and communities severely affected by the impacts of the coronavirus, including additional assistance to help businesses identify alternative export markets or supply chains.

While the finer details have not been released and are subject to the passage of legislation, it is imperative that businesses consider and take advantage of these benefits announced by the Government, especially given the temporary nature of these measures. The instant asset write-off for example, will end on 30 June 2020 and is expected to revert to assets costing less than $1,000 from 1 July 2020.

 For the full Media Release, please see https://www.pm.gov.au/media/economic-stimulus-package.

 Please note the information provided here is general in nature and does not constitute financial, tax or other professional advice. You should consider whether the information is appropriate for your needs and seek professional advice prior to making any decision.

 

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