COVID-19 Economic Stimulus Package

This package has been superseded by the Government Economic Stimulus Package in response to Coronavirus. The most recent package has been published by Semmens & Co on 30/03/2020.

The Government has announced a $17.6 billion economic stimulus package to support the Australian economy and households while dealing with the challenges posed by COVID-19. The package has four key parts:

  • Supporting business investment
  • Providing cash flow assistance to help small and medium sized business to stay in business and keep their employees in jobs
  • Targeted support for the most severely affected sectors, regions and communities
  • Household stimulus payments that will benefit the wider economy

The measures are all temporary and targeted. They aim to ensure Australia responds to the immediate challenges but also helps Australia bounce-back stronger on the other side, without undermining the structural integrity of the Budget.

The package has four parts:

1. Delivering support for business investment:
  • There will be an increase to the instant asset write off threshold, from $30,000 to $150,000.  The instant asset write off will also be expanded to help businesses with an aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
  • The Government will provide a time limited, 15 month investment incentive (available through to 30 June 2021), to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50% of the asset cost in the year of purchase.

These measures commenced 12 March 2020 and will support over 3.5 million businesses (over 99% of businesses) employing more than 9.7 million employees or 3 in every 4 workers. The measures are designed to support business by allowing them to press-ahead with planned strategic investments and encourage businesses to bring investment forward, to support economic growth over the short term.

2. Cash flow assistance for businesses:
  • Businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020, will be able to access a payment of $2,000 up to $25,000. The payment will be tax free.  Businesses will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.
  • Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.
3. Stimulus payments to households to support growth:
  • The Government will provide a one-off $750 stimulus payment to pensioners, people on social security payments, veterans and other income support recipients and eligible concession card holders.
4. Assistance for severely-affected regions:
  • The Government will provide $1 billion to support those sectors, 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.

To implement the stimulus plan, a package of Bills will be introduced into Parliament in the final Autumn sitting week in March 2020 for Parliament’s urgent consideration and passage.

If you have any questions or need advice and clarity specific to your business, feel free to contact Semmens & Co on 03 8320 0320 for a free consultation.

Thoughts From Our Principals

Mark Semmens

Mark is a Chartered Accountant with a wealth of experience in accounting and taxation. Mark is a Member of Chartered Accountants Australia and New Zealand, the Tax Practitioners Board and the National Tax and Accountants Association.

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Daniela Semmens

Daniela Semmens is a Co-Director of Semmens & Co. and joined the company as General Manager in 2017. Daniela is an Affiliate Member of Chartered Accountants Australia and New Zealand and also a Member of the Australian Institute of Project Management.

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