Government announces increased tax benefits in response to the Coronavirus

The Government has announced its economic response to the Coronavirus in the form of a $17.6 billion economic stimulus package.  The package has been marketed as a measure to protect the economy by maintaining confidence, supporting investment and keeping people in their jobs.

The Key Tax Measures include:

  • From Thursday 12 March 2020, the instant asset write-off threshold has been increased from $30,000 (for businesses with an aggregated turnover of less than $50 million) to $150,000 (for businesses with an aggregated turnover of less than $500 million) until 30 June 2020.
  • All other new (but not second hand) purchases will be eligible for a time-limited 15-month investment incentive (through to 30 June 2021) which will operate to accelerate certain depreciation deductions. Under this measure businesses (with a turnover of less than $500 million) which will be able to immediately deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
  • Tax-free payments of up to $25,000 for eligible small and medium businesses (i.e., with a turnover of less than $50 million that employ staff) based on their PAYG withholding obligations.

The payments will be credited to the month or quarterly activity statements for business considered eligible.

  • Tax-free payments of $750 to social security, veteran and other income support recipients and eligible concession card holders. These payments will commence to be automatically made from 31 March 2020.
  • Administrative relief from the ATO for some tax obligations for people affected by the Coronavirus outbreak, on a case-by-case basis.
  • Wage subsidies to support the retention of apprentices and trainees – Employers with less than 20 full-time employees may be entitled to apply to the Department of Education, Skills and Employment for Government funded wage subsidies amounting to 50% of an apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. The maximum subsidy for each apprentice/trainee is $21,000.
  • Assistance to severely affected regions – The Government has also committed to set aside $1 billion to support 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.

Financial impact of coronavirus

We recognise that some may be concerned about the economic impact of the coronavirus. Please keep in mind that downturns in the market are inevitable, and we expect that this downturn will come to an end, just like every single downturn also has in the last 100 years. For the majority it is likely that there is nothing they should be doing now as far as making changes to investment strategies or selling investments. But please contact your financial adviser if you are concerned about your personal financial situation.

General Advice Warning
This advice may not be suitable to you because it contains general advice which does not take into consideration any of your personal circumstances. All strategies and information provided in this email are general advice only. Please arrange an appointment to seek personal financial and taxation advice.