Date posted: 16/03/2020 5 min read

Coronavirus has infected the Australian economy and the stimulus package could be the prescription

The Australian Government’s $17.6 billion dollar economic stimulus package presents a unique chance for small-medium sized businesses to take the economic fight to coronavirus.

That's the verdict from Chartered Accountants Australia and New Zealand (CA ANZ), in highlighting some of the key benefits and opportunities for small businesses to make a much-needed difference.

"Coronavirus has infected the economy, with world markets seeing red and supply chains being impacted, Australian businesses are feeling the effects," CA ANZ Australian Tax Leader Michael Croker said.

"This stimulus package is the equivalent of an economic flu shot to help ward off the adverse financial impact of coronavirus."

"We don't know how long supply chains or workforce availability may be impacted, nor when consumer confidence will return, but these initiatives will help."

"This package will see eligible businesses get cash payments, and tax relief. Deserving members of our community will get cash and are encouraged to spend it. Perhaps more will be needed in the future, time will tell."

"We urge all small businesses owners to act now and familiarise themselves with the key outputs from the economic stimulus package in order to keep afloat in these uncertain times."

Croker said Chartered Accountants will be out and about helping clients identify which of the new incentives and concessions a small-medium sized business is eligible for, and singled out four particularly good ones in today's package.

1. Instant asset write-off a big boost to business

"Before today, small businesses had been able to claim immediate tax deductions of up to $30,000 for things like vehicles, tools and office equipment," Croker said.

"From today, the threshold of this tax reduction will be raised from $30,000 to $150,000. This will also be expanded to include businesses with a total annual turnover of less than $500 million (up from $50 million).

"This is a big win for Australian businesses and the economy and will drive purchases of more big ticket items."

"The question now becomes one of confidence: will businesses open their cheque books in the current economic environment? Will lenders provide loans if needed to fund the purchases?

2. Cash stimulus to fire up customers

"From the end of this month, people who access the pension, Youth Allowance, Newstart, and Family Tax Benefits, amongst others, will receive $750."

"That's money in their pockets they can spend at a time when most local businesses are doing it tough."

"As happened in response to the GFC payouts, now it's up to business to calibrate their sales strategies to take advantage."

"I'm hopeful that businesses hit by the triple-whammy of drought, bushfires and coronavirus will start thinking now about how they can best benefit from this."

"Right now, business cashflow is key so shop local, shop often."

3. Hire now, pay less

"Nearly 700,000 small to medium businesses will also be able to get cash payments of between $2,000 and $25,000 to help pay wages or hire extra staff."

"Chartered Accountants across Australia will work with the ATO and other agencies on the eligibility criteria to make sure these amounts flow quickly to eligible businesses."

4. Billions for apprentices

"The package also includes $1.3 billion in support payments to keep almost 120,000 apprentices employed, providing an employment lifeline to a vulnerable group who might otherwise have been facing redundancies."

"Economic setbacks can create long-term skill droughts and this measure helps small businesses to not only keep apprentices and trainees on, but also have the skills necessary to recover after the COVID-19 emergency passes."

"We look forward to seeing how these policies roll out and received, and to working with relevant government agencies."

"We will be checking-in with Chartered Accountants to see if these measures are working and passing their on the ground insights back to policy makers. Additional future measures may be needed."

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