Economic response to the coronavirus

The Federal Government have announced an economic stimulus package in response to the coronavirus outbreak to hopefully help stimulate the economy. The measures will include incentives to fast track investment, apprentice wage subsidies and cash payments of up to $25,000 for small and medium businesses to save jobs and help businesses battle supply disruptions. In addition to the business measures there will be one-off cash payments to pensioners and Newstart recipients in a measure aimed at helping stimulate consumer demand.

Business Payments Up To $25,000

The government will include a $6.7 billion funding assistance package for small and medium businesses to assist with; the payment of wages, put on extra staff and invest or prepare for the downturn. Under these measures, eligible businesses with turnovers of up to $50 million will be eligible for tax free payments of up to $25,000.

Businesses that pay the ATO income tax (PAYG Withholding Tax) on employees’ salary and wages either monthly or quarterly will receive a payment equal to 50% of the amount withheld up to a maximum of $25,000.

Business Asset Write-Off Scheme

The current business instant asset write-off scheme will be significantly expanded. The expanded instant asset write-off is expected to operate from today to the 1 July 2020 to help stimulate business investment.

Under the present scheme, businesses with turnovers of up to $50 million can instantly write-off assets valued at up to $30,000.

Under the changes announced the business turnover threshold will increase to $500 million and the asset value that can be written-off will increase to $150,000.

Apprentice Wage Assistance

Wage subsidies will be provided to small businesses who employ apprentices. The package will offer up to $7,000 each quarter as a wage assistance for each apprentice so small businesses can retain existing apprentices & trainees or re-employ apprentices & trainees who lose their position from a small business because of the coronavirus downturn.

Cash Payments to Pensioners & Newstart Recipients

within the stimulus package there will be one-off cash payments to both pensioners and Newstart recipients

If you have any questions or concerns as to how this may affect your business, contact us at cannon accounting and we can go over the finer details with you.