The government says the package is “temporary, targeted and proportionate”, and is designed to prop the economy up, so it can best recover when the coronavirus crisis subsides.
The $17.6 billion package is focused on keeping small businesses afloat, and their employees in work, and will be targeted to support the most affected sectors and communities, the government’s statement said.
Support for Business Investment
The Government is backing businesses to invest to help the economy withstand and recover from the economic impact of the Coronavirus. The two business investment measures in this package are designed to assist Australian businesses and economic growth in the short term, and encourage a stronger economic recovery following the Coronavirus outbreak.
The instant asset write-off threshold has been increased from $30,000 to $150,000 which will expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
They will also be introducing a time limited 15-month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
These two measures will intend to support over 3.5 million businesses (over 99 per cent of businesses) employing more than 9.7 million employees.
More information about support for business investment is available here.
Cash flow assistance for Businesses
To help support small and medium employing enterprises and to improve business confidence, assistance will be provided to manage cash flow challenges that have resulted from the Coronavirus.
The government will provide up to $25,000 back to small and medium-sized businesses, with a minimum payment of $2,000 for eligible businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff. The payment will be tax free. This measure will benefit around 690,000 businesses employing around 7.8 million people.
The Government is supporting small business to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice. This measure will support up to 70,000 small businesses, employing around 117,000 apprentices.
More information about cash flow assistance for business is available here.
Payments to households, to support growth
The Government will provide a one-off $750 payment to social security, veteran and other income support recipients and eligible concession card holders. Around half of those that will benefit are pensioners. There will be one payment per eligible recipient. For example, if a person qualifies for the one-off payment in multiple ways, they will only receive one payment. The payment will be tax free and will not count as income for Social Security, Farm Household Allowance and Veteran payments.
More information about payments to households is available here.
Severely affected regions
The Government has set aside $1 billion to support those regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.
This will include the waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and the waiver of entry fees for Commonwealth National Parks. It will also include additional assistance to help businesses identify alternative export markets or supply chains. Targeted measures will also be developed to further promote domestic tourism. The Australian Tax Office (ATO) is also providing administrative relief for some tax obligations for people affected by the Coronavirus outbreak, on a case-by-case basis. The ATO will set up a temporary shop front in Cairns within the next few weeks with dedicated staff specialising in assisting small business. In addition, it will consider ways to enhance its presence in other significantly affected regions, making it easier for people to apply for relief. The ATO is considering further temporary shop fronts and face-to-face options.
More information about severely affected regions is available here.