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Stimulus Packages - What this means for you.

Stimulus Packages - Letter from Director - Robert Maslak

As you will be aware, our Federal and State governments have released economic stimulus packages that will endeavour to keep our businesses operational and staff employed during these uncertain times.

While Tax Concepts continue to be available via phone, email, and video conferencing mediums, we would like to provide a summary of the relevant stimulus announcements that may directly impact our individual and business clients and possibly answer some of the questions we have already been receiving. 

1. Tax Relief

  • Small businesses with employees will receive a “tax-free” payment, to be applied against activity statements, of between $20,000 and $100,000 which will based upon the amount of withholding tax from wages (PAYGW) they would normally pay between the months of January-September 2020. The first of these payments will be eligible from April 2020 upon lodgement of the March BAS. Please note, that this payment will only be available to businesses that have and maintain employees. We can assist with any calculations as to the amount your particular business may be entitled to upon review of your wages figures.
  • State based payroll tax has been removed for the current 2019/20 year for businesses with payroll amounts between $650,000-$3,000,000.
        1. Accelerated depreciation claims are available for asset purchases up to $150,000 for business assets purchased prior to 30/06/2020.
        2. Further accelerated depreciation deductions will be available on asset purchases over $30,000 for the 2020/21 financial year.

        2. Additional Business payments.

        • Employers with apprentices will be able to apply for a 50% wage subsidy for these apprentices up to an amount of $21,000 per apprentice over the period 1 January 2020 - 30 September 2020. This will be a cash injection for business designed to keep apprentices in the workforce. More details on the application process should be available shortly.
        • A “Business Support Fund” will be established by the State government in conjunction with the Victorian Chamber, Australian Hotels Association, and AI Group to distribute up to $500mill to the State’s hardest hit industries including hospitality, tourism, accommodation, and retail. Again, details for this fund are still in progress.

        3. Welfare Payments

        • People receiving eligible government income support payments will receive two payments of $750, one from the beginning of April and the second from mid-July.
        • The Newstart/Jobseeker payment will be effectively doubled by a 6-month “Coronavirus supplement” of $550 per fortnight. Eligibility for these payments will be extended to include sole traders and casual workers who have had their incomes reduced to an amount below the income tests. Those experiencing significant drops in income should seek Centrelink assistance to determine if they fit the new criteria.
        • Access to superannuation through hardship provisions in both the 2019/20 and 2020/21 financial years allowing eligible recipients to access $10,000 in each year without tax and Centrelink income test impacts.
        • Easier access to meet income test limits by reducing “deeming” rates in line with RBA interest rate cuts.

        4. Banking

        • Easier access to meet income test limits by reducing “deeming” rates in line with RBA interest rate cuts.
        • Banks and the Federal government offering a guarantee for payment of unsecured business loans of up to $250,000 for small businesses over a 3-year period.

        While not all of these measures will be applicable to all clients, the small business PAYGW benefit of being able to retain staff in the short to medium term, will potentially see the biggest practical impact of all of these measures and one that will most likely assist most small business clients. 

        Further to the information above, if you have any queries please visit the following government link which discusses these measures in more detail - https://www.business.gov.au/risk-management/emergency-management/coronavirus-information-and-support-for-business

        We wish all of our clients and their families a safe and healthy outlook during these uncertain times.