The Government has announced its economic response to the Coronavirus in the form of a $17.6 billion economic stimulus package. The package has been marketed as a measure to protect the economy by maintaining confidence, supporting investment and keeping people in their jobs. Whether it will be enough, only time will tell.

We have already seen the impact the panic has had on the businesses, especially in travel and hospitality space. Whilst everyone needs to be vigilant, we need to do everything possible to support each other.

The bill should be introduced into Parliament in the final sitting week in March 2020 (i.e., presumably from 23 March 2020) for urgent consideration and passage.

The Key Tax Measures include:

• From Thursday 12 March 2020, the instant asset write-off threshold has been increased from

$30,000 (for businesses with an aggregated turnover of less than $50 million) to $150,000 (for businesses with an aggregated turnover of less than $500 million) until 30 June 2020.

• A time-limited 15-month investment incentive (through to 30 June 2021) which will operate to accelerate certain depreciation

This measure will also be available to businesses with a turnover of less than $500 million, which will be able to immediately deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.

As announced, this measure is proposed to only apply to new depreciating assets first used, or installed ready for use, by 30 June 2021.

• Tax-free payments of up to $25,000 for eligible small and medium businesses (i.e., with a turnover of less than $50 million that employ staff). This will be based on their PAYG withholding liabilities.

The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax free. This measure will benefit around 690,000 businesses employing around 7.8 million people. Businesses will receive payments of 50 per cent of their PAYG withholding liability on their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.

• Tax-free payments of $750 to social security, veteran and other income support recipients and eligible concession card holders. There will be one payment per eligible recipient. If a person qualifies for the one off payment in multiple ways, they will only receive one payment. Payments will be from 31 March 2020 on a progressive basis, with over 90 per cent of payments expected to be made by mid-April.

• Administrative relief from the ATO for some tax obligations for people affected by the Coronavirus outbreak, on a case-by-case Additionally, the ATO is setting up a temporary shop front in Cairns within the next few weeks with dedicated staff specialising in assisting small business and is currently considering further temporary ‘shop fronts’ and face-to-face options.

In addition to these key tax measures, the Government has also announced additional economic stimulus measures including:

• Wage subsidies to support the retention of apprentices and trainees – Employers with less than 20 full-time employees may be entitled to apply for Government funded wage subsidies amounting to 50% of an apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. The maximum subsidy for each apprentice/trainee is $21,000.

Importantly, where an employer is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.

It is proposed that employers will be able to register for the subsidy from early-April 2020.

• Assistance to severely affected regions – The Government has also committed to set aside

$1 billion to support regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education. This will include:

• The waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and the waiver of entry fees for Commonwealth National
• The provision of additional assistance to help businesses identify alternative export markets or supply
• Further targeted measures to further promote domestic tourism.

Hopefully we will have more details after the next government sitting.

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