Economic Response to the Coronavirus

The Federal Parliament voted last night in acceptance of the $84 billion economic stimulus package. The bills have been passed in both the House of Representatives and the Senate.

Below is the list of key tax measures and payments that are included in the package.

Business:

The instant asset write-off threshold is set to be increased from $30,000 (for businesses with a turnover of less than $50 million) to $150,000 (for businesses with a turnover of less than $500 million) from 12th of March to 30th of June 2020
Immediate 50% deduction of the cost of an eligible asset with the balance to be depreciated under current depreciation rules for assets purchased from 12th March 2020 to 30th June 2021
Tax-free payments from $20,000 to $100,000 for eligible small and medium businesses that employ staff based on their PAYG withholding obligations – this will be applied as a credit of 100% of the PAYG withheld when lodging an activity statement from March to June 2020 with the ATO
Relief from the ATO for some tax obligations for persons affected by the Coronavirus outbreak – deferral of certain lodgements and payments
Temporary relief for directors from any personal liability for trading whilst insolvent
Wage subsidies to support employers who pay apprentices and trainees – employers who employ less than 20 full-time employees may be entitled to apply for a wage subsidy that will cover 50% of an apprentices or trainees wages for up to nine months from 1st January to 30 September 2020 with a maximum subsidy of $21,000 for each employee

Individuals:

Coronavirus supplement being paid by Centrelink at a rate of $550 per fortnight for eligible individuals
Tax-free payments of $1500 to social security, veteran and other income support recipients and eligible concession card holders
Temporary early release of superannuation of up to $10,000 during the 2020 financial year and a further $10,000 in the 2021 financial year – these payments will be tax-free and will not affect Centrelink payments
Government assistance to regions and communities that have been severely affected by the outbreak

Timing of Assistance:

Immediately, with deductions to be included in 2019-20 tax returns – Increased instant asset write off, accelerated depreciation
As soon as practicable – Support for Coronavirus-affected regions and communities
From 31 March 2020 – First round of $750 payments to support households
Applications from early-April – Assistance for existing apprentices and trainees
Applications from mid-April 2020 – Temporary early release of superannuation
From 27 April 2020 – Income support and a Coronavirus supplement
From 28 April 2020 – First phase of Boosting Cash Flow for Employers (tax-free PAYG credits)
From 13 July 2020 – Second round of $750 payments to support households
From 21 July 2020 – Second phase of Boosting Cash Flow for Employers (tax-free PAYG credits)