$17.6 billion economic stimulus package
The Federal Government have announced an economic stimulus package, which is aimed at keeping businesses afloat, and people in work.
It is a stimulus package designed to provide immediate stimulus to the economy, offering an instant boost – rather than permanent changes to the budget, and includes:
- Tax relief for small businesses
- Money to help keep apprentices in work
- One-off cash payments for welfare recipients
Small to Medium Sized Business
A $6.7b small business stimulus package for small and medium-sized business will see them eligible for cash payments, assistance with apprentice wages, and tax incentives with small business write offs extended.
Cash Payments – 50% of employees tax to help pay wages
Small and medium-sized businesses will receive cash payments of up to $25,000 to help pay wages or hire extra staff. This will be directly linked to amounts spent on wages and salaries, with a business to receive payments equal to 50% of tax due on employees pay packets for the period January to June – up to $25,000.
Business that lodge a monthly statement will get three times the amount for March to make up for the previous two months – up to a maximum of $25,000.
The government provided the following example: A construction firm employees eight workers, earning $89,730 a year, and lodges returns monthly. In each of March, April and June, the firm reports withholding $13,806 in tax. For March, the business receives a grant of $20,709 (half of $13,806, times three to make up for the previous two months). And for April, the firm receives $4291, having reached the $25,000 cap.
Keeping apprentices in jobs
The stimulus package includes $1.3 billion in support payments to keep apprentices in their jobs. It will see the Government pay 50% of the wages of 120,000 apprentices – up to $21,000 for each employee – backdated to January 1, up to 30 September. This is available for small business up to 20 employees, and businesses of any size where they pick up an out-of-work apprentice who lost their job after 1 March.
Asset write-off expanded
This measure sees the asset write-off expanded, with businesses able to claim an instant tax deduction for purchases worth up to $150,000 until 1 July – rather than the current limit of $30,000. Businesses able to access this write-off has also been extended – from businesses with a turnover of up to $50m, to those with a turnover of up to $500m. This measure is aimed at encouraging business to spend now on equipment, helping to boost the economy.
One-off cash payments to welfare recipients
Welfare recipients will receive a one-off cash payment of $750 from March 31. This includes pensioners, carers, veterans, families, young people and jobseekers. The Government is hoping that recipients of this cash payment ‘will have the common sense to spend the money in ways which would benefit the economy’.
In addition, casual workers who contract COVID-19, or who are forced to isolate themselves, would be eligible for a Newstart welfare payment while out of work – subject to an assets test.
Health sector package
In addition to the economic stimulus package, the Government also announced a $2.4 billion package for the health sector, which includes money for testing, pop-up clinics, telephone consultations for the elderly in isolation, additional pathology centres, research, and for the national medical stockpile.