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Coronavirus Pandemic - Australia’s Economic Stimulus Package

Coronavirus Pandemic - Australia’s Economic Stimulus Package

12/03/2020

The Morrison Government has released a stimulus package to assist Australians from the devastating affects of the coronavirus pandemic.

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To answer the questions many of you have, we at Benefit Accounting have summarised the key takeaways regarding the support that may be available to you at this point in time.

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Please take care everyone and contact us to find out how this may be affecting you personally, financially and in your business. Read on…

BUSINESS

  • Up to $25,000 but a minimum payment of $2,000 is set to go to 690,000 small to medium-sized businesses that employ staff between January - June 2020. It will be tax-free and calculated at 50% of the tax withheld on wages as reported on Business Activity Statements (March and June 2020 quarters). This cashflow release will automatically roll out to eligible employers from end of April and July with the BAS lodgement. See our Second Stimulus Article for the updates! Fact sheet here for more info.

  • Businesses who employ trainees or apprentices will receive wage subsidies of 50% of the apprentice or trainee’s wage for up to 9mths between January - September 2020. Fact sheet here for more info (page5).

  • The ATO is offering tax relief packages including deferrals for up to four months for businesses directly affected by the coronavirus, granted on a case-by-case basis.

  • The instant asset writeoff threshold will be temporarily increased from $30,000 to $150,000 for small to medium-sized businesses to purchase assets until June 2020. Depreciation rules will also be accelerated until June 2021 where 50% of the initial asset cost can be depreciated in the year of purchase. All this in an effort to keep the economy stimulated by encouraging businesses to carry on with their plans to purchase large items, such as cars, machinery, equipment, etc. Fact sheet here for more info.

  • If you operate a business without employees, this stimulus package is designed to keep the economy stimulated so you continue to receive customers with the hopes to remain in healthy operation.

INDIVIDUALS

  • $750 cash is on its way to low-income earners. Around half of the 6.5m recipients of this stimulus are pensioners. It will be tax-free, one payment per eligible recipient only. These payments will automatically roll out from 31st March-mid April.
    If you’re an employee and not receiving any social security, this won’t come to you unfortunately.
    Follow this link for more info on who will receive this: https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_households.pdf

The prime minister, Scott Morrison, has advised that the stimulus package could be updated in the May budget depending on how severely the economy continues to be affected by the coronavirus.

In addition to health concerns, this pandemic is rocking tourism and financial markets exponentially. Not only on a global scale but very close to home. Keep your hygiene and immune system high but also be vigilant and seek financial advice.

Chart from March 2019 to 16/03/2020.

Chart from March 2019 to 16/03/2020.