What does the Government's stimulus package mean for my business?

Mar 12, 2020

The government has announced measures to assist small and medium businesses with cash flows and to encourage investment. Your business may benefit from the following measures:

PAYMENTS FOR EMPLOYERS

Any business with turnover less than $50m who employs staff, will be eligible for a cash payment equal to 50% of the amount that is payable as PAYG Withholding in the their March 2020 and June 2020 quarterly Activity Statements or March to June monthly Activity Statements. The minimum payment is $2,000 and the maximum payment is $25,000 per employer. Where an employer has paid wages but is not required to withhold, they will receive the minimum payment of $2,000. For monthly lodgers the cash payment for March is adjusted to 150% of the PAYG Withholding for the month to equate monthly and quarterly lodgers.

PAYMENTS FOR EMPLOYERS OF APPRENTICES

Eligible employers can apply for a rebate of 50% of the wages of apprentices and trainees paid between 1 January 2020 and 30 September 2020 up to a maximum of $21,000 per apprentice or trainee. An eligible employer is one who employs less than 20 employees and the payment is only available where the apprentice or trainee was in training with a small business prior to the 1st of March 2020.

ACCELERATED DEPRECIATION

The instant asset write off is being extended up to 30 June 2020. It currently applies to businesses with turnover under $50m on assets costing less than $30,000. It will now be extended to businesses with turnover under $500m on assets costing less than $150,000. Eligible businesses can claim an immediate tax deduction in their 2020 Tax Return for the full cost of assets purchased for less than $150,000.

There is a further measure which could become more useful after 30 June 2020 when the immediate asset write off is due to reduce to $1,000. This measure applies from now until 30 June 2021 allowing businesses with turnover under $500m to deduct 50% of the cost of new assets of any value with the remaining 50% to be deducted under ordinary depreciation rules.