The Coronavirus Stimulus Package, announced by Prime Minister Scott Morrison, has major implications for small and medium businesses.
While the $750 payments to pensioners and people getting Newstart, Carer’s Allowance and Family Tax Benefits should flow through to the business community, it is the supercharging of the instant asset write-off, an accelerated depreciation scheme and a cashflow boost for small and medium-sized employers that will mean most to our clients.
In unveiling the package, the Prime Minister said about 690,000 businesses will be able to get grants for up to $25,000 and the Federal Government will also support employers to keep 117,000 apprentices in jobs over nine months.
While full details are still being revealed, it appears about $6.7 billion will be spent over the next four years to help small businesses continue operating.
Key items of interest for our clients are:
- The government will offer small businesses with less than 20 employees, up to $21,000 per apprentice ($7000 each quarter) to subsidise wages for up to nine months.
- A payment of up to $25,000 (with a minimum payment of $2000) will be given to businesses that currently employ people (1 January, 2020 – 30 June, 2020) and have a turnover of up to $50 million. The payments will be tax-free and will be delivered automatically through the tax system, so no new forms will be required.
- A 50 per cent wage subsidy for apprentices or trainee wages for up to nine months from 1 January, 2020 to 30 September, 2020.
- The instant asset write-off threshold will be raised from $30,000 to $150,000 until 30 June, 2020, and access expanded to businesses with an annual turnover of $500 million. Relevant purchases made between now and June 30, 2020 (eg a truck or a shop fit-out), can be written off immediately.
- There will also be a 50 per cent accelerated depreciation deduction over and above what businesses can already deduct in the first year and is available for 15 months to June 30, 2021 as an investment incentive.
If you want further insights into the impact of the Coronavirus Stimulus Package on your business, contact Walshs on 07 32215677 or email your relevant partner.