Understanding Recent Government Stimulus Packages for Businesses

Both the Federal and NSW governments have recently announced stimulus packages in wake of the impact of the coronavirus and signs of recession.

$17.6 billion from the Federal government will primarily go towards welfare recipients, small and medium businesses, and tourism and other virus-hit businesses. $11 billion will be spent before June 30.

Likewise, the NSW government is spending $2.3 billion in health funding, job support, and economic stimulus.

Payments to Individuals

  • Pensioners, veterans, those on social security and other income support recipients
  • A $750 payment
  • It will be one-off, tax-free, and will not count as income for certain means-tested benefits
  • Payments commence 31 March 2020

Payments to Businesses with Employees

  • Businesses with employees and turnovers up to $50 million
  • Tax-free payments of up to $25,000
  • You will receive a payment equal to 50% of the PAYG withholding amount on your March and June quarterly BASs up to $25,000
  • If you lodge monthly, it applies to the March-June BASs (with March’s withholding amount multiplied by 3, then 50%, to make up for January and February). This will be paid until the limit and will be delivered as a credit in the activity statement system
  • If your credit amount puts you into a refund position, payments of refunds will commence after 28 April 2020
  • If you pay salary and wages but are not required to utilise PAYG withholding, you will receive a minimum payment of $2000
  • The money will be available over the four months of March, April, May and June

Payments to Businesses with Apprentices

  • Businesses employing fewer than 20 employees
  • A wage subsidy of 50% of each apprentice’s or trainee’s wage
  • The subsidy is granted for 9 months from 1 January to 30 September 2020. It is limited to a total of $21,000 ($7,000 per quarter) per apprentice or trainee
  • If you can’t afford to hold on to an apprentice, the subsidy will be available to a new employer

Payments to Support Business Assets

  • Businesses with turnovers of up to $500 million (an increase from $50 million)
  • An expansion of the instant asset write-off scheme: businesses can now instantly write-off assets valued at up to $150,000 (an increase from $30,000)
  • This allows a full deduction for the cost to acquire the asset (new or second-hand), rather than deducting over a number of years, where the asset’s cost is less than the net of any GST credit
  • This covers depreciable assets acquired from today until 30 June 2020
  • An additional 50 per cent accelerated depreciation deduction over and above existing deductions will be available to June 30, 2021
  • This will cover of 50% of the asset’s cost in the year of purchase (in addition to the normal amount of depreciation deduction), resulting the asset’s cost being deducted over a shorter period than normal. This most likely applies to assets that are not subject to instant asset write-off

Payments to Businesses in Industries most impacted by the Coronavirus

  • Industries such as tourism, agriculture and education, and regional and community based businesses
  • $1 billion overall
  • Support will include a waiver of certain fees, assistance to find alternative export markets or supply chains, promotion of domestic tourism, and administrative relief for certain tax obligations, including payment deferral

Payments to Businesses in NSW with employees

  • Businesses with payrolls of up to $10 million
  • $450 million overall for the waiver of payroll tax for three months (the rest of 2019-20). So, you will save a quarter of your annual payroll tax bill in 2019-20
  • $56 million to bring forward the next round of payroll tax cuts by raising the threshold limit to $1 million in 2020-21

Payments to Businesses in NSW in Industries strongly impacted by the Coronavirus

  • Eligible small businesses including bars, cafes, restaurants and trades
  • $80 million overall to waive a range of fees and charges

Payments to boost Public Assets and Infrastructure in NSW

  • $250 million to employ additional cleaners of public infrastructure such as transport assets, schools and other public buildings
  • More than $250 million to bring forward maintenance on public assets including social housing and crown land fencing
  • $500 million to bring forward capital works and maintenance

It’s important to understand how these payments apply specifically to your business and how your business can best adjust to the current crises. Calibre Business Advisory has advisors prepared to offer help. If you want to know more about the stimulus packages, including the eligibility and application process, please contact us.

Calibre Business Advisory invests more time than most firms into finding solutions for our clients. Contact our business advisors and tax accountants to discover new options for your business in Australia and beyond.

Important Disclaimer: Readers should not act solely on the basis of the material on this page. Items herein are general comments only and do not constitute or convey advice. Legislation and proposals of legislation are also subject to constant change. We therefore recommend that formal advice be sought before acting in any of the areas. This news article is issued as a guide to the readers. Calibre Business Advisory Pty Ltd and its associated entities disclaims any losses that may be incurred as a result of the reader undertaking any action based on this article.