Update: 22nd March 2020
A major second stage $66 billion economic stimulus package has been announced by Scott Morrison on Sunday 22nd March to build on the initial $17 billion initiatives. The new measures include:
- Small business to receive cash grants of up to $100,000 to help them
- Temporarily doubling the Jobseeker Payment (previously called Newstart) – which will be accessible to casual staff who fall ill or need to self isolate due to COVID-19 through a ‘Crisis payment’
- Allowing people to access $10,000 from their superannuation in 2019-20 and 2020-21
- Guaranteeing unsecured small business loans up to $250,000
- Reducing deeming rates by a further 0.25 per cent
Of particular note, the small business grants may be a life line for many who are struggling to keep on staff and continue to operate, what we understand so far is the following:
- Not-for-profits and small businesses with a turnover under $50 million will receive a tax-free cash payment of up to $100,000 to help them retain staff and continue operating.
- The Government expects 690,000 businesses employing 7.8 million people and 30,000 not-for-profits will be eligible for measures in the stimulus package.
- It doesn’t mean extra pocket money if you’re an employee, but by linking the payments to staff wage tax withholdings, businesses will be given an incentive to hold on to more of their workers.
“We know that small businesses are enormously resilient but this is really hurting them,” Mr Morrison said.
“Whether it is a coffee shop or mechanic or hairdresser… by providing at a minimum $20,000 and up to $100,000 for small businesses who employ people, [it] gives them a chance to get to the other side.”
Once further information surrounding these measures comes to light – we will continue to keep you updated. A further breakdown of the stimulus measures can be found here.
Australia is not invulnerable to the Coronavirus (COVID-19), to the extent that 1 in 6 Australian businesses are already seeing the effects of the virus. As we see the virus continuing to spread, the Federal Government has announced the release of a multi-billion dollar stimulus package to help counteract the negative impact the virus is having and will continue to have on the Australian economy.
The coronavirus economic stimulus package is made up of four parts:
1. Support for business investment; made up of an increase to the instant asset write-off to $150,000 for assets acquired from 13 March 2020 to 1 July 2020 and expanded to include businesses with a turnover less than $500million;
2. Cash flow assistance for businesses; incorporating a tax-free payment of up to $25,000 businesses with employees and a turnover of less than $50million. Businesses will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days;
3. Payments to households to support spending; including a $750 stimulus payment to pensioners, social security, veteran, other income support recipients, and eligible concession card holders; and
4. Assistance for severely-affected regions; with the aim of supporting regions and communities that have been extremely affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.
If you, your family, or your business are affected by the Coronavirus and would like more information about the government stimulus package, please contact us.
Details of the economic stimulus package announcement can be found here.