$17.6B Stimulus Package in response to COVID-19

StuartTax, Australian Budget, COVID19, General

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Today the Federal government announced a $17.6 billion economic stimulus package in an attempt to prevent a recession caused by the coronavirus outbreak.

The Prime Minister anticipates the economic measure will benefit around 690,000 businesses employing 7.8 million people.

It is estimated the stimulus will inject $22b into the domestic economy and will include initiatives to:

  • Fast track investment
  • Subsidise wages for apprentices
  • Save jobs, by providing cash payments of up to $25,000 for small and medium businesses.

The package includes five primary strategies to assist Australians during this pandemic and avoid a recession.

Cash flow assistance for businesses specifically, tax-free payments for PAYG withholding up to $25,000 for businesses with a turnover of up to $50m. The ATO will deliver the payment as a credit to the business upon lodgment of their activity statements, and where this results in an overall credit, the ATO will refund in cash.

Business investment support for businesses with an aggregated turnover below $500m. The instant asset threshold will be significantly expanded to assets up to 150K and will operate from today until 1 July 2020.

Wage subsidies of up to 50% for applicable small businesses who employ apprentices

Household support for low-income Australians and families including a one of $750 payment

Affected businesses regional and community support with $1b to support Australian communities reliant on tourism, agriculture and education.

Individuals and households including a one-off $750 payment to lower-income Australians.

Administrative relief – The Australian Tax Office (ATO) will provide administrative relief for certain tax obligations (similar to relief provided following the bushfires) for taxpayers affected by the Coronavirus outbreak, on a case-by-case basis.

Get in touch with your 542 Partners account manager to find out how the stimulus package may impact your business.

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