The Morrison Government has announced an economic stimulus package of $17.6 billion designed to bolster small and medium businesses. This is a response to the ongoing coronavirus pandemic.
Two Key Components of the Economic Stimulus Package
- Supporting business investment;
- Providing cash flow assistance to help small and medium sized businesses stay viable and keep their employees in jobs.
Up to 6.5 million individuals and 3.5 million businesses would be directly supported by the package. In this trying time, our focus is on the affected businesses and how we can help get them through.
Stimulus Cash Flow Assistance for Businesses
$6.7 billion of the stimulus package is allocated to boost cash flow for almost 700,000 small to medium businesses. These businesses will receive between $2,000 – $25,000. This payment is to go towards paying wages or hiring extra staff. Businesses with a turnover of less than $50 million who employ staff are eligible for this payment. It will also be will be tax free.
Businesses will receive payments of 50% of their Business Activity Statements or Instalment Activity Statement from 28 April. It is expected that refunds will be paid within 14 days.
Secondly, $1.3 billion will go to support businesses who employ apprentices. Therefore, Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage for up to 9 months. Further to this, if a small business is unable to retain an apprentice, the subsidy is available to a new employer of that apprentice
The government has released a more in depth fact sheet highlighting what you need to know.
For further information on stimulus package, the government media release will help answer any questions.
Increasing the Instant Asset Write-Off
The government has also announced that it has increased the instant asset write-off threshold to $150,000 from $30,000. Businesses with an aggregated annual turnover of less than $500 million (up from $50m) are eligible for this write-off. This will be in effect until 30 June 2020.
If at any stage you are uncertain about these opportunities, please reach out. We are glad to do our part in keeping small and medium businesses afloat and profitable in these trying times.