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The federal government announced the first federal COVID-19 Stimulus Package on 12 March 2020.
Federal COVID-19 Stimulus
We need to talk about the federal COVID 19 stimulus package. Today – the day we publish this episode on 19 March 2020 – things are changing dramatically. And so you need to know what is coming. So you can tell your clients.
On the 12th of March the federal government announced its first stimulus package to help Australia get through this. The devil is in the detail of course, and that detail won’t be known until early next week starting 23 March 2020.
So in this episode Bob Deutsch, Senior Tax Counsel of The Tax Institute, will walk you through the measures the government announced on 12th of March.
This interview was recorded on 18 March 2020. We say this because the topic is of course highly current and will be outdated soon.
Federal Government Stimulus Package
There are 6 financial measures announced on 12 March 2020. Some will help most. Some will only help a few.
1 – $150,000 Instant Asset Write-Off
The instant asset write-off is changing to $150,000 until the 30th of June 2020.
2 – Uncapped Investment Incentive
Then there is the investment incentive, uncapped, until the 30 June next year, so 2021 giving you a 50% deprecation in the first year.
Both measures are for businesses with a turnover of less than $500m and both measures only help you if you still have cash to spend on investments. If you are struggling to make payroll, then these measures are irrelevant for you.
3 – 50% of W2 Cash Boost
Then there is the $25,000 tax-free cash boost that will reimburse 50% of any PAYG Withholding you did in the March or June quarter. THIS will help you if cash flow is tight.
4 – 50% Wage Subsidy for Apprentices and Trainees
And if you employ apprentices and trainees, you will receive a 50% wage subsidy of these wages until 30 September 2020, of up to $21,000 per apprentice.
5 – $750 Handout To Some
Centrelink recipients, pensioners, veterans and others are to receive a cash payment of $750.
6 – $1b for Particularly Affected Areas
And there is another $1b for areas particularly affected by COVID 19.
So these are federal government measures. Then there are state COVID -19 stimulus packages which we will cover another time.
ATO Measures
And then there are also 5 ATO measures to help you cope with this crisis. And these are:
1 – The due date for paying your BAS, PAYG I, income tax assessments and FBT as well as excise have been deferred by 4 months.
2 – If you expect a GST refund, you can swap to monthly BAS to get this refund much quicker into your pockets.
3 – You can vary your PAYG instalments to zero for this March quarter. And you can request a refund of the last two instalments you paid for the September and December quarters last year
4 – The ATO will remit any interest and penalties incurred after 23 January this year.
5 – And you can enter into a low-interest payment plan for existing tax liabilities.
All this will come your way if you qualify as an affected business. What that means will hopefully become clearer with time.
We will give you an update next week, when the details of these measures are on the table.
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Disclaimer: Tax Talks does not provide financial or tax advice. All information on Tax Talks is of a general nature only and might no longer be up to date or correct. You should seek professional accredited tax and financial advice when considering whether the information is suitable to your or your client’s circumstances.
Last Updated on 07 September 2020
