The Federal Government has announced a $17.6 billion stimulus package over a three year period to mitigate the impact of the coronavirus pandemic. It is expected that $11 billion of this amount will be spent over the next three months.
The package is made up of four key parts:
- Supporting business investment
- Providing cash flow assistance to help small and medium sized business to stay in business and keep their employees in jobs
- Household stimulus payments that will benefit the wider economy;
- Targeted support for the most severely affected sectors, regions and communities
The Federal Government has also funded a $2.4 billion national health response plan.
Instant asset write-off scheme increase - $700 million
- The government has lifted the instant asset write-off scheme from $30,000 to $150,000 and extended it to businesses with an annual turnover of up to $500 million from $50 million.
- New equipment, computer hardware, office fit-outs and furniture, and vehicles are among the potentially eligible assets.
- Businesses have until the 30th June to take advantage of the higher limit.
15 month investment incentive - $3.2 billion
- The government is providing $3.2 billion to back business investment by providing a time limited 15 month investment incentive, through to 30 June 2021, to support business investment and economic growth over the short term, by accelerating depreciation deductions.
- Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase.
Boost cash flow for employers - $6.7 billion
- Small to medium-sized businesses with a turnover of less than $50 million that employ staff, between the 1st January 2020 and 30th June 2020, will receive a tax free payment of between $2,000 and $25,000 to boost cash flow.
- This measure will benefit around 690,000 businesses employing around 7.8 million people.
- Businesses will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from the 28th April with refunds to then be paid within 14 days.
Apprentice and trainee support for employers - $1.3 billion
- Eligible employers can apply for a wage subsidy of 50 per cent of an apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020.
- Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.
- This is expected to support the jobs of 120,000 apprentices and trainees.
Consumers - $4.8 billion
- Up to 6.5 million Australians, including pensioners, social security, veteran and other income support recipients and eligible concession card holders, will receive $750 each in tax free cash payments from the 31st March.
- This is an attempt to drive consumers to spend in order to protect jobs and keep the economy out of a recession.
- Services Australia will also offer a Major Personal Crisis exemption for 14 days for those who cannot meet current income support obligations due to required isolation.
SEVERLY AFFECTED SECTORS, REGIONS & COMMUNITIES
Affected sectors, regions and communities - $1 billion
- This funding will be used to support sectors, regions and communities that have been disproportionately affected by the economic impacts of the coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.
- This will include the waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks.
- It also includes additional assistance to help businesses identify alternative export markets or supply chains.
- Targeted measures will also be developed to further promote domestic tourism. Further plans and measures to support recovery will be designed and delivered in partnership with the affected industries and communities.
- The government is also offering administrative relief for certain tax obligations, including deferring tax payments up to four months. This is similar to relief provided following the bushfires for taxpayers affected by the coronavirus, on a case-by-case basis.
The Federal Government has also funded a $2.4 billion national health response plan which includes:
- Setting up more than 100 pop up clinics in areas of need across the country, to alleviate pressure on GP clinics and hospital emergency departments
- A temporary workforce to be made available in case of a staff shortage
- Infection control training and education will also be provided to aged care staff
- The Government will fund specialist ‘inreach’ pathology testing for COVID-19 and influenza in residential aged care facilities
- Increasing funding to public hospitals
- Boosting the National Medical Stockpile of essential medicines and masks