The Federal Government last week unveiled their $17.6 billion stimulus package — which includes grants of up to $25,000 for small business, support for those employing apprentices and accelerated depreciation amongst other measures.
$25,000 PAYG Withholding Payout for Small Businesses
One of the most significant offerings for small business is a grant payout of up to $25,000 and a minimum of $2,000 for small and medium-sized businesses with employees.
Businesses will receive payments of 50% of their PAYG Withholding reported and paid in their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.
The payments will relate to PAYG withholding from 1 January to 30 June 2020.
The payment will be tax-free.
Those that pay wages but are not required to pay tax are likely to receive a minimum payment of $2,000.
Keeping Apprentices Employed
Eligible employers can apply for a wage subsidy of up to 50% of an apprentice’s or trainee’s wage, up to $21,000 per apprentice – $7,000 per quarter – for up to 9 months from 1 January 2020 to 30 September 2020.
Where a small business is not able to retain an apprentice or trainee, the subsidy will be available to a new employer that employs that apprentice.
Instant Asset Write-off Extension
The government will significantly extend the instant asset write-off for small and medium-sized businesses, in a bid to encourage investment.
Currently, the tax write-off is available for businesses with a turnover of up to $50 million, for purchases of up to $30,000. This will be extended to include companies with turnover of up to $500 million, and purchases of up to $150,000.
The extension will apply until June 30 2020.
Accelerating Depreciation Deductions
In addition, the government is accelerating depreciation deductions, through a limited 15-month investment incentive.
Until June 30 2021, businesses with a turnover of less than $500 million will be able to deduct an additional 50% of an asset cost in the year the asset was purchased. For example, a $1m piece of equipment acquired 1 July 2020 that would be depreciable at 20% under the old rules, would previously have received a year-one deduction of $200k. Under the proposed stimulus, this deduction will be $600k (being 50% of $1m, and 20% depreciation on the remaining $500k cost).
The Federal Government has confirmed it will provide one-off payments of $750 to people on Newstart and to pensioners. The payment is tax-free.
ATO Assistance – Emergency Support
The ATO has advised they will provide emergency support to businesses on a case by case basis.
This support will not be automatically provided and will need to be applied for by calling the ATO.
Reductions in payment plans, interest and instalments are options to assist with cashflow.
It is expected that the focus of this support will be on the most hard-hit industries, including the tourism, and travel businesses, however, if your business has been impacted please contact for further information.
Announcements from WA State Government
The McGowan Government have announced a package to assist businesses and households, including:
- Bring forward of Payroll Tax Relief from 1 July 2020
- One-off $17,500 grant to businesses with payroll between $1m and $4m from July 2020
- Deferral of payroll tax payments for small to medium-sized businesses
- Freezing of household fees and charges
- Early assistance package to support the tourism sector (marketing, and more affordable regional flights).
Banks’ Response to the Government’s Stimulus Package
The Reserve Bank of Australia (RBA) has provided the banking sector with a significant liquidity boost on 15 March, purchasing bank assets through repurchase agreements totaling $8.8 billion.
Each of the Big 4 Banks have made announcements as to how they will support businesses affected by the economic impact of COVID-19 including:
- a deferral of scheduled loan repayments
- waiving fees and charges
- interest free periods or no interest rate increases
- debt consolidation to help make repayments more manageable.
If you would like to understand more about how these measures will impact you and your business and what you need to do to take advantage of them, call us today on (08) 6212 7200 to speak to one of our team of professionals.