Yesterday the Morrison government announced a $15bn economic stimulus package, including cash payments for businesses and wage subsidies for apprentices.
Australian businesses will receive an assistance package worth at least $8.7bn in response to the Coronavirus outbreak, as the government seeks to urgently stimulate the economy and stave off a looming recession.
Cash payments for businesses, wage subsidies for apprentices and a massive expansion of the instant asset write-off aimed at encouraging the sale of cars, utes, tools and industrial equipment formed the centrepiece of the business boost that will kick in as early as Friday.
The business package, announced on Thursday, is also accompanied by assistance for households, with direct cash payments for households to form part of the overall economic stimulus plan, expected to be worth more than $15bn.
A major focus of the business package, which aims to “keep business in business and Australians in jobs”, will be a tax-free cashflow boost for employers worth up to $25,000.
The payment will be open to businesses with a turnover of less than $50m and is designed to help pay wages or for investment to protect against a downturn in activity.
Under the scheme, an eligible business that withholds tax for the Australian Tax Office on employees’ salary and wages will receive a payment equal to 50% of the amount withheld, up to a maximum payment of $25,000. The minimum payment will be $2,000.
The $6.7bn measure is estimated to benefit about 690,000 businesses employing around 7.8 million people, and will be made available for businesses who lodge business activity statements for the March and June quarters.
Treasury has already warned that Australia faces a 0.7% contraction in growth in the March quarter as a result of the twin hit from the bushfires and the virus outbreak, with Australia facing the risk of a technical recession of two consecutive quarters of negative growth.
In response to fears a recession could put hundreds of thousands of people out of work, the government has made apprentices a focus of the business package. A new subsidy will be made available to employers in a bid to keep approximately 120,000 apprentices in a job.
The scheme, costing $1.3bn over the next six months, will offer small businesses with fewer than 20 full-time workers up to $7,000 in wage assistance for each apprentice per quarter, and will apply for both the retention of existing apprentices and the re-employment of someone who loses their position as a result of the Coronavirus downturn.
The wage subsidy will amount to 50% of the apprentice’s or trainee’s wage until the end of September, and will be offered to a new employer if a small business can’t afford to hold on to staff.
A third key element of the package includes an expansion of the instant asset write-off aimed at “supercharging” the sale of new tools, cars and kitchen equipment.
Under the proposed changes, the threshold for the instant asset will be lifted from $30,000 to $150,000, and expanded to businesses with an annual turnover up to $500m, increased from $50m.
The measure is expected to be worth $700m over the forward estimates and will help 3.5m businesses.
This stimulus package is yet to be legislated, however in the meantime, if you have any questions regarding how these measures will impact you or your business, please do not hesitate to contact our office.
Sourced from The Guardian 11-03-20