Coronavirus relief package – key business areas
The Federal Government has announced today a $17.6 billion package in response to economic headwinds as a result of the Coronavirus. Broadly, the package is targeted at business capital spend and employment; welfare groups and severely affected regions such as those in the tourism, agriculture and education sectors.
For businesses, the three key areas of the support package are:
1. Accelerated write offs for business capital spend
This will comprise two measures and applies to businesses with aggregated turnover less than $500m.
The first is to increase the instant asset write off threshold from $30,000 to $150,000 from 12 March 2020 and as noted above expanding the access to these concessions for businesses with aggregated turnover of less than $500m until 30 June 2020.
The second measure is to allow businesses an accelerated depreciation write off such that 50% of certain “eligible assets” can be immediately written off with the remaining undepreciated cost depreciated under existing rules. This measure is intended to apply until 30 June 2021.
2. Cash support for businesses with employees
The component of this package is aimed at supporting employers in small to medium size (SME) businesses with a turnover of less than $50m. This will include tax free cash support payments of up to $25,000 for eligible SMEs that employ staff and calculated based on PAYG withholdings.
Small businesses may also be eligible to apply for a wage subsidy of 50% equal to wage costs for apprentices and trainees for up to 9 months from 1 January 2020 to 30 September 2020.
3. Assistance for severely affected regions
A $1 billion support package has been set aside to support regions and communities that have been disproportionately impacted economically by the Coronavirus such as those in the tourism, education and agriculture sectors.
Of note, assistance includes support to help affected businesses identify alternative export markets or supply chains including targeted measures to support and promote domestic tourism. The Australian Taxation Office will also be providing administrative relief for certain tax obligations to be assessed on a case by case basis.
Bentleys expects that this third area of the package will be an area of great interest for many struggling businesses that have been significantly impacted by the Coronavirus. The issue will be whether the $1 billion set aside will provide any meaningful relief having regard to the number of affected businesses.
Other support areas
The package also includes a one-off cash payment of $750 primarily aimed at welfare recipients (social security, income support recipients and eligible concession card holders).
What to do next
The Government is proposing to introduce relevant legislation towards the end of this month (March 2020) of which further details will be provided on eligibility requirements for the relevant support. It is recommended that you speak to your local Bentleys advisor to determine the extent of any relief that can be obtained for your business under these proposals.
Disclaimer: This information provided by Bentleys NSW is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.