Stimulus Package

|by Jun Yang|Business Advisory,Taxation and Compliance

Morrison government unveiled $23 billion stimulus package during the COVID – 19 crises in the hope to avoid Australian economy sliding into recession.

If you are recipients on Newstart, the disability support pension, carers’ allowance, youth allowance, veterans support payments, family tax benefits, Commonwealth senior health card holders and 2.4 million aged pensions, you are expecting a cash payment of $750 handed out automatically through the tax system from 31 March 2020 on a progressive basis, with over 90% of payments expected to be paid by mid-April. Government encourages people to spend this one off cash handout to keep the economy going.

For business turnover up to 500 million, the instant asset write off threshold is lifted to $150,000 until 30 June 2020. Previous instance asset write off is up to $30,000 for business aggregated turnover under $10 million.

Also for business turnover less than $500 million, for the period beyond 30 June 2020 till 30 June 2021, government is to support business investment and economic growth in the short term by accelerating depreciation deductions. Business can deduct an additional 50% of the asset cost in the year of purchase.

For business with a turnover of less than $50 million that employ workers, between 1 January 2020 and 30 June 2020, business will receive payments of 50% PAYG Withholding reported on their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to be paid within 14 days. For eligible small and medium sized business, the employer benefit is up to $25,000 with a minimum of $2,000. This measure is to benefit 690,000 small to medium business employing around 7.8 million people.

There are around 120,000 apprentice and trainees working in the small business. Eligible employers can apply for wages subsidy of 50% of apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020.

Assistance is provided to severely – affected industries like tourism by waiving of fees and charges who operates the business in the Great Barrier Reef Marine Park and Commonwealth National Parks. It also includes assistance to help agriculture and education businesses identify alternative supply chain and export markets.

Overall government is determined to keep the GDP growth in the positive territory for March Quarter. But ironically the financial market responds to the stimulus package with a drop of 7.9%.

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