The Commonwealth Government has announced a third stimulus package worth $130 billion on top of the $66.1 billion and $17.6 billion stimulus packages to combat the effects of Coronavirus (COVID-19) on Australia’s economy. The raft of measures are aimed at supporting business investment, cash flow assistance, providing assistance for severely affected regions, support for households including casuals, sole-traders, retirees and those on income support, assistance for businesses to keep people in a job and regulatory protection and financial support for businesses to stay in business which will be rolled out in the coming weeks and months.
Support for Business
As at 22 March, the Government is now providing up to $100,000 to eligible small and medium sized businesses, and not-for-profits (including charities) that employ people with a minimum payment of $20,000. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff. The payment will be tax free.
Backing Business Investment (BBI)
A time limited 15-month investment incentive to support business investment and economic growth over the short term by accelerating depreciation deductions. This applies to eligible assets acquired from 12 March 2020 and first used or installed by 30 June 2021. Businesses with a turnover of less than $500 million will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset cost.
Coronavirus SME Guarantee Scheme
The Government will establish the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SMEs) to get access to working capital to help them get them through the impact of the Coronavirus. Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs.
Providing Temporary Relief for Financially Distressed Businesses
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. The Corporations Act 2001 will be amended to provide temporary and targeted relief for companies to deal with unforeseen events that arise as a result of the Coronavirus.
Supporting Apprentices and Trainees
If you employ an apprentice or trainee, you may be eligible for a wage subsidy of 50% of their wage paid from 1 January 2020 to 30 September 2020. You can register for the subsidy from early April 2020.
The Government is providing vital support for not-for-profits (NFPs) to withstand the economic impacts of the Coronavirus.
The Government is providing vital support to sole traders to withstand the economic impacts of the Coronavirus.
For more information visit Economic Response to the Coronavirus
Support for Individual and Households
HomeBuilder provides eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home. HomeBuilder will assist the residential construction market by encouraging the commencement of new home builds and renovations.
Temporarily Reduce Superannuation Minimum Drawdown Rates
The Government is temporarily reducing superannuation minimum drawdown requirements for account based pensions and similar products by 50 per cent for 2019-20 and 2020-21. This measure will benefit retirees by providing them with more flexibility as to how they manage their superannuation assets.
Reducing Social Security Deeming Rates
On top of the deeming rate changes made at the time of the first package, the Government is reducing the deeming rates by a further 0.25 percentage points to reflect the latest rate reductions by the RBA.
As of 1 May 2020, the lower deeming rate will be 0.25 per cent and the upper deeming rate will be 2.25 per cent. The change will benefit around 900,000 income support recipients, including Age Pensioners.
For more information visit Support for Individual and Households