Governments Economic Response - Support for businesses
The Government’s economic response for businesses to date:
1. Boosting cashflow
On 12 March 2020, the Government announced a Boosting Cashflow for Employers measure introducing a minimum payment of $2,000 up to a maximum payment of $25,000 for all employers across Australia based on 50% of PAYG Withholdings as per lodged Activity Statements between March 2020 and June 2020.
Over the weekend, this measure has been enhanced and now provides up to $100,000 to eligible small and medium-sized businesses and Not-For-Profits that employ people.
The minimum payment has now been lifted to $20,000.
Under the enhanced scheme, if your turnover is under $50m, and you employ people, you will qualify for an automatic payment (we expect by credit to your ATO account) equal to 100% of the PAYG Withheld amount between March and June 2020 of at least $10,000 and up to $50,000.
An additional payment is also being introduced in the July to October 2020 period equal to this, meaning eligible businesses could receive at least $20,000 and up to $100,000 over the next 8 months.
2. Temporary relief for distressed businesses
The economic impacts of the Coronavirus and health measures to prevent its spread could see many otherwise profitable and viable businesses temporarily face financial distress.
It is important that these businesses have a safety net to make sure that when the crisis has passed they can resume normal business operations. One element of that safety net is to lessen the threat of actions that could unnecessarily push them into insolvency and force the winding up of the business.
The Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive.
The package also includes temporary relief for directors from any personal liability for trading while insolvent, and providing temporary flexibility in the Corporations Act 2001 to provide temporary and targeted relief from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health crisis.
The ATO will tailor solutions for owners or directors of business that are currently struggling due to the Coronavirus, including temporary reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.
3. Increasing the Instant Asset Write-off
The Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
4. Backing Business Investment
The Government is introducing 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 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
5. Supporting Apprentices and Trainees
Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for 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.
Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
6. Support for Coronavirus affected regions
The Government will set aside $1 billion to support regions most significantly affected by the Coronavirus outbreak.
This is an evolving situation and as such further updates and announcements are expected to be made over the coming days, weeks and (possibly) months. Please stay in touch with us via this webpage, or our Facebook page for future updates.