By Stuart Jones, Senior Tax Writer, Thomson Reuters
On Sunday 22 March 2020, the Government announced an additional $66.1bn economic stimulus package in response to the coronavirus (COVID-19). This second package includes:
- cash flow payments up to $100,000 (minimum $20,000) to SME employers and charities;
- regulatory protection for SMEs and directors;
- early release of superannuation up to $20,000;
- a $550 fortnightly supplement for job seekers, sole traders, students;
- a further $750 stimulus payment for income support recipients and concession card holders;
- super pension minimum drawdowns reduced by 50%;
- deeming rates cut by a further 0.25%; and
- an SME guarantee scheme for loans by banks.
The Treasurer said this second economic response package brings the Government’s total package to $189bn (or 9.7% of GDP), when combined with the initial $17.6bn package announced on 12 March 2020, and the $105bn of RBA funding to support lending to SMEs.
The first $17.6bn stimulus package increased the instant asset write-off from $30,000 to $150,000 and expanded it to include access for businesses with aggregated annual turnover of less than $500m (up from $50m) until 30 June 2020. Businesses with a turnover of less than $500m are also able to deduct an additional 50% of the asset cost in the year of purchase, while additional support will be provided for apprentices and trainees.
Legislation to implement the Coronavirus Economic Response Package was introduced on 23 March 2020 and passed the same day by both houses of Parliament with amendments. The package of Bills urgently implements aspects of the Government’s package originally announced on 12 March 2020, and followed up on 22 March 2020 with the second economic response package above containing $66.1bn of measures.
ATO admin concessions
The ATO has previously announced administrative measures aimed at assisting businesses impacted by COVID-19. For example, allowing the deferral of some tax payments for up to 6 months and providing quicker access to GST refunds by switching from quarterly to monthly reporting.
Treasury has released a range of fact sheets with further details on the eligibility requirements for the coronavirus economic response measures.