Last week, the Australian Morrison Government announced a new $17.6 billion stimulus package in response to the economic challenges our country is currently facing.

As several of our clients have contacted us in the last week in relation to how this new economic plan will impact them, we wanted to address this issue immediately, with an emphasis on the support for business investment, and cash flow assistance areas Mr Morrison covered.

There are two major changes designed to support business investment. Firstly, $700 million has been put towards increasing the current instant asset write off threshold from $30,000 to $150,000, for businesses with an annual turnover of less than $500 million, (increased from $50 million). This will continue until 30 June 2020.

Secondly, $3.2 billion has been contributed to an investment incentive, which aims to assist business investment and economic growth over the next 15-months, by accelerating depreciation deductions. If your turnover is under $500 million, you will be able to deduct an extra 50% of the cost of the asset in the year you purchased it. These changes will continue until 30 June 2021.

Two major points were also covered relating to cash flow assistance for businesses. Firstly, for eligible small and medium-sized businesses, $6.7 billion will be contributed to boost cash flow by between $2,000-$25,000. This tax-free payment is targeted at businesses that employ staff between 1 January 2020 & 30 June 2020 and have a turnover of less than $50 million. From 28 April 2020, eligible businesses will receive refunds in their Business Activity Statements or Instalment Activity Statement payable within 14 days.

$1.3 billion has been used to support small businesses employing apprentices and trainees. If eligible, an employer can apply for a wage subsidy of up to 50% of their apprentice or trainee’s wage between 1 January 2020 & 30 September 2020.

As of now, AWT Accountants are continuing to monitor the situation, and will provide you with relevant updates as they become available.

Please note that the commencement of this stimulus package is still subject to it being passed in parliament, which will be decided on 23 March.
If you have any questions, please contact us via email at clientlink@awtaccountants.com.au, or by phone at (08) 9303 8900.