On 22 March 2020, the Australian government announced a cash payment of between $20,000- $100,000 along with government guaranteed loans of up to $250,000. These announcements complement a range of earlier measures to encourage banks to continue lending to small businesses as well as deferring loan repayments for six months. The business investment measures have been designed to assist Australian businesses and economic growth in the short-term, and encourage a stronger economic recovery following the Coronavirus outbreak.
Expansion of the Instant Asset Write-off Scheme from $30,000 to $150,000 with to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. For example, assets that may be able to be immediately written off are a tractors or other farm machinery and cars, utes and trucks for farming businesses.
The Government is introducing a time limited 15 month investment incentive to support business investment and economic growth over the short-term, by accelerating depreciation deductions. Additional 50% immediate tax deduction for businesses with turnovers of less than $500 million.
Businesses with turnovers of less than $500 million will also be able to claim an additional immediate tax deduction of 50% of the cost of assets purchased between 12 March 2020 and 30 June 2021. This is on top of the normal tax depreciation deduction the business would be entitled to (including the instant asset write-off explained above).
Businesses with turnovers of less than $50 million that employ staff between 1 January 2020 and 30 June 2020 will receive tax-free cash payments of 50% of their Business Activity Statement or Installment Activity Statement from 28 April 2020.
Eligible employers can apply for a wage subsidy of 50% of their apprentice or trainee wage for up to nine months from 1 January 2020 to 30 September 2020.
The Government will allow people to access up to $10,000 from their superannuation with no tax. There will also be a temporary 50-per-cent reduction in superannuation minimum draw-down requirements for account-based pensions in 2019-20 and 2020-21.
The Reserve Bank (RBA) announced yesterday a rate cut, quantitative easing and cheap credit are new measures designed to help businesses during the coronavirus crisis.
The Australian Banking Association has announced a relief package that will allow small business customers to defer loan repayments by six months. Banks developed this Small Business Relief Package following discussions with APRA and ASIC to provide the appropriate regulatory treatment. Under the scheme, small businesses will be able to defer loan repayments for six months by simply contacting their lender. Further details of how the actual scheme will be rolled out is yet to be finalised. Read more
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