The Federal Parliament has rushed through $84 billion in financial support for workers, students and businesses affected by the coronavirus outbreak, before wrapping up for a five-month-long break.
The legislation supports both the first coronavirus economic stimulus package, worth $17.6 billion, and the $66 billion in direct financial support announced in the second package this past weekend.
$17.6 billion stimulus (12 March 2020)
- Instant asset write-off threshold extended from $30,000 to $150,000, with turnover for eligible businesses extended from $50 million to $500 million until 30 June 2020.
- A 15 month investment incentive for businesses with a turnover of less than $500 million to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules to apply.
- A payment of up to $25,000 for eligible SMEs with a turnover of less than $50 million that employ staff.
- A 50 per cent wage subsidy for eligible businesses that employ trainees or apprentices for up to nine months from 1 January 2020 to 30 September 2020.
- A one-off $750 payment to social security, veteran and other income support recipients and eligible concession card holders.
- A $1 billion payment to communities significantly affected by the Coronavirus. This includes measures such as the waiver of fees and charges to tourism businesses in certain regions, assistance to help business find alternative export markets or supply chains, and administrative assistance from the ATO to affected businesses.
$66 billion stimulus (22 March 2020)
- Small businesses to receive a cash payment of up to $100,000 for the period of March 2020 to September 2020. The payment will be worth 100% of the tax those SMEs, with a turnover less than $50 million, are withholding from their employees salary and wages. The payment will be tax free and also available to eligible charities and not-for-profit entities. Eligible businesses that withhold tax to the ATO on their employees’ salary and wages – they report it each month or quarter anyway – will receive a payment equal to 100 per cent of the amount withheld, up to a maximum payment of $100,000.
- Announcement of Coronavirus SME Guarantee Scheme to support SMEs with turnover of less than $50 million. Under the Scheme, the Commonwealth will guarantee 50%, through the participating banks, of an eligible loan to small and medium enterprise customers that have been impacted by the coronavirus.
The Scheme will have the capacity to support lending of $40 billion to small and medium businesses.
Loans will be used for working capital purposes and be unsecured and it will be for loans granted within 6 months starting 1 April 2020.
The Scheme will apply to new or existing customers of banks and non-bank lenders.
Lenders will not be charged a fee for accessing the Scheme.
It will be repayment free for 6 months.
The maximum loan will be $250,000 for a term up to 3 years.
It will not apply to re-financing of existing customers. Those already have existing loans that will benefit from the ABA announcement.
Through this measure, the Government is offering to guarantee $20 billion.
- The Government is also allowing sole traders who have seen their hours of work or income fall 20% or more as a result of COVID-19 to access their superannuation capped at $10,000 this financial year and a further $10,000 next financial year. The withdrawals will be tax free.