On 12 March 2020, the Government announced a $17.6 billion economic stimulus package stage 1 to support the Australian economy and households to deal with the challenges posed by the spread of COVID-19.
The package has four parts:
1. Delivering support for business investment:
- increase the instant asset write off threshold from $30,000 to $150,000 and expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. The Government announced on 9 June 2020 that it will extend access to the enhanced instant asset write off for six months to 31 December 2020.
- providing a time limited 15 month investment incentive (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 per cent of the asset cost in the year of purchase. These measures start today and will support over 3.5 million businesses (over 99 per cent of businesses) employing more than 9.7 million employees or 3 in every 4 workers. The measures are designed to support business sticking with investment they had planned, and encouraging them 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 receive a payment from $2,000 up to $25,000. The payment will be tax free and 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 per cent 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:
- provide a one-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession card holders.
4. Assistance for severely-affected regions:
- $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.
The Federal Government has since released stage 2 of the stimulus plan which expands on the cash flow assistance to small and medium sized employers and the $750 stimulus payment to pensioners and other income support recipients.