In response to the COVID-19 outbreak, the Federal Government has announced a two stimulus packages in an effort to boost the economy, please find a summary of the main points of the packages below.

First package 12th March 2020

Stimulus payments to households to support growth

  • One-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession card holders.
  • Payments will be from 31 March 2020 on a progressive basis                                                      

Small business instant write-off

  • Applies to the purchase of a new or used assets.
  • Current threshold of $30,000 will increase to $150,000 (GST exclusive).
  • A full deduction is claimed for the cost of the asset(s) purchased.
  • The asset must be on farm and ready for use by 30/6/20 to claim the deduction in the 2019/20 year.
  • The asset can be paid for in cash or financed using an equipment loan, hire purchase or chattel mortgage.
  • The threshold applies PER asset.  Multiple assets can be purchased meeting the criteria.
  • The rules apply from 12/3/20 to 30/6/20.
  • On 1/7/20, the threshold reduces from $150,000 to $1,000.

 Business investment incentive

  • Applies to the purchase of a new assets only.
  • The rules apply from 12/3/20 to 30/6/21.
  • In the year of purchase, the following deductions will be claimed;
  • 50% of the purchase price.
  • 15% of the remaining balance.
  • For example, if you purchased a $600,000 of equipment and it arrived on farm before 30/6/20, your deduction this year would be $345,000 as illustrated below;
  • $300,000 (ie. $600,000 * 50%)
  • $45,000 (ie. $600,000 less $300,000 deduction - $300,000 * 15% per general asset pool)
  • The asset must be on hand and ready for use by 30/6/20 to claim the deduction in the 2019/20 year.
  • The asset can be paid for in cash or financed using an equipment loan, hire purchase or chattel mortgage.
  • The threshold applies PER asset.  Multiple assets can be purchased meeting the criteria.

 Cashflow incentives for business (SBIAW)

  • Applies for the March 2020 quarter BAS.
  • You will receive a payment equating to 50% of the PAYG withholding tax in the March 2020 quarter BAS, capped at $25,000.
  • For example, if your PAYG withholding tax for the March 2020 quarter was $18,000, you will receive a payment of $9,000.
  • The payment is tax-free.
  • Once your March 2020 quarter BAS is lodged, the ATO will process the payment automatically.

Second Package (22 March 2020)

Stimulus payments to households to support growth

  •  A second $750 payment to eligible Centrelink recipients on the 13th July 2020
  • Allowing people to access $10,000 from their superannuation in 2019-20 and 2020-21.
  •  Temporarily doubling the Jobseeker Payment, previously called Newstart
  • Guaranteeing unsecured small business loans up to $250,000

 Cash flow for business

  • Government announced that it is providing up to $100,000, with a minimum payment (conditions apply e.g. less than $50m turnover etc) of $20,000.
  • Under the enhanced scheme, employers will receive a payment equal to 100% if their wages withheld on their March 2020 quarter BAS (modified for monthly lodgers) with the maximum initial assistance payment of $50,000 and a minimum initial assistance payment of $10,000 to be received by businesses.
  • An additional payment replicating the initial amount received upon lodgement of the March BAS will be paid after lodgement of the June 2020 quarter BAS (modified for monthly lodgers) raising total entitlements to a maximum of $100,000 and minimum entitlement of $20,000.
  • The entitlements will be based on BAS’ lodged and will not require additional forms to be completed. The payments will be made as a credit to the BAS’ (activity statements) with any overall paid out by the ATO within 14 days of BAS lodgement with initial payments projected to commence 28 April.
  • The minimum entitlement totalling $20,000 will be received as long as the business declares wage payments in their March 2020 BAS even if they are not required to withhold tax. The amount of the tax withheld will be tax free.
  • The business is required to be an employer established prior to 12 March 2020 and the second benefit instalment will only be received if the business is still trading at the time.

 Supporting apprentices and trainees

Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage paid during the 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.
  • Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
  • Support will also be provided to the National Apprentice Employment Network, the peak national body representing Group Training Organisations, to co-ordinate the re-employment of displaced apprentices and trainees throughout their network of host employers across Australia.

We are all in unchartered territory with these unprecedented events unfolding around the world.  There is so much information to absorb and it is constantly flowing and changing.  We are committed to working with tenants and landlords to achieve the best outcomes for you.  Please contact us by phone or email and we will be happy to assist you in any way we can.

Please take care, 

Nola Brown
Horsham Real Estate

Mobile:   0418 504 855
www.horshamrealestate.com.au