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Businesses - summary

Businesses - summary

Businesses - summary

The Federal government has now released two stimulus packages, on 12 March and on 22 March, with significant measures targeted at businesses. Here we translate the government’s measures for businesses into plain English and include more detailed explanations of each one below, focusing on eligibility and access. These measures have now been legislated and we encourage you to contact your Ruddicks adviser if you have any questions.

The business measures include:

  • “Boosting cash flow for employers”

What this means: This is essentially a refund of Pay As You Go (PAYG) tax withholding in relation to employees’ wages for eligible businesses, which will be delivered in March to September 2020 Activity Statements. Read more

  • “Supporting apprentices and trainees”

What this means: A wage subsidy for eligible employers for 50% of apprentice’s or trainee’s wages for up to 9 months, from 1 January 2020 to 30 September 2020. Read more

  • “Increasing the instant asset write-off”

What this means: The threshold will be increased from $30,000 to $150,000 and eligibility extended to businesses with aggregated turnovers up to $500m – up to 30 June 2020. A number of eligibility criteria apply. Read more

  • “Backing business investment”

What this means: For businesses with aggregated turnovers up to $500m, accelerated depreciation will be available on new eligible assets acquired between 12 March 2020 and 30 June 2021 with 50% depreciation deduction available in the year of acquisition. Read more

  • “Temporary relief for financially distressed businesses”

What this means: Temporary measures to make it harder to commence bankruptcy proceedings and also temporary relief from directors’ personal liability. Read more

  • “Supporting the flow of credit”

What this means: The government will guarantee 50% of a new type of loan to Small to Medium Enterprises of up to $250,000 to enable businesses to access funding more easily. Read more


COMMUNITIES

The part of the announcement with the least amount of detail is the one to support regions and communities most severely economically affected by coronavirus, “as soon as practicable”. The government has announced that they will set aside a $1bn fund to support these communities, particularly identifying those in the tourism, agriculture and education sectors.

The promised support includes waiving fees for entry into Commonwealth National Parks, helping businesses identify alternative export markets and a promise of specific measures to further promote domestic tourism. The Minister for Trade, Tourism and Investment will work with affected industries and communities to develop recovery plans and measures.

Relief from tax obligations

Additionally, the Australian Tax Office (ATO) is also providing administrative relief for some tax obligations for people affected by the Coronavirus outbreak, on a case-by-case basis. We provide additional information on this on our Administrative Measures by the ATO page.

Further information

You may wish to access the dedicated Treasury web page for the stimulus package.

If you have any questions please do not hesitate to contact our office. We will keep you updated as more developments come to light.



DISCLAIMER:

Liability limited by a scheme approved under Professional Standards Legislation.

The content of this newsletter is general in nature. It does not constitute specific advice and readers are encouraged to consult their Ruddicks adviser on any matters of interest. Ruddicks accepts no liability for errors or omissions, or for any loss or damage suffered as a result of any person acting without such advice. This information is current as at 24 March 2020, and was published around that time. Ruddicks particularly accepts no obligation or responsibility for updating this publication for events, including changes to the law, the Australian Taxation Office’s interpretation of the law, or Government announcements arising after that time.

Any advice provided is not ‘financial product advice’ as defined by the Corporations Act. Ruddicks is not licensed to provide financial product advice and taxation is only one of the matters that you need to consider when making a decision on a financial product. You should consider seeking advice from an Australian Financial Services licensee before making any decisions in relation to a financial product. © Ruddicks 2020

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