COVID-19 – GOVERNMENT’S ECONOMIC RESPONSE
The Government is acting decisively to support households and businesses and address the significant economic consequences of the Coronavirus pandemic. A second set of economic responses have been announced, which combined with the previous actions, total $189 billion across forward estimates. The responses provide support to workers, households and businesses through this difficult time. They are also designed to position the Australian economy to recover strongly once the health challenge has been overcome.
How the stimulus packages will affect individuals and households :-
Over the next six months, the Government is establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight to new and existing recipients of Jobseeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
In addition, two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders starting from 31 March will be made, to help support confidence and domestic demand in the economy.
Further measures including the following have also been announced :-
- Temporary early release of superannuation
- Temporarily reducing superannuation minimum drawdown rates
- Reducing social security deeming rates
How the packages will support your business :-
- Boosting Cash Flow for Employers – up to $100,000 to eligible small and medium-sized businesses, and not-for-profits (NFPs) that employ people, with a minimum payment of $20,000 between April 2020 and October 2020
- Temporary relief for financial distressed businesses by 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 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.
- Increase of 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 $50,000) until 30 June 2020.
- Accelerating depreciation deductions to 50% on assets purchased by 30 June 2021
- Apprentice/trainee wage subsidies of 50% for 9 months from 1 January 2020 to 30 September 2020, up to a maximum of $21k per eligible apprentice or trainee. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.
- Guarantees of 50% to SME lenders to support new short-term unsecured loans to SMEs, to provide businesses with funding to meet cash flow needs.
- Cutting red tape for lenders providing credit to existing small business customers, allowing them to get access to credit quickly and efficiently.