Summary of Federal and State Government Economic Measures as at 30TH March 2020

The Government is acting decisively in the national interest to support households and businesses and address the significant economic consequences of the Coronavirus.

While the full economic effects from the virus remain uncertain, the outlook has deteriorated since the Government’s initial Economic Response announced on 12 March 2020. The second package announced on 22^nd March 2020 and today’s announcements bring the Federal Government support total to a staggering $320bn.

Please find below a summary of the economic measures being offered on a Federal and State level as of 30^TH March 2020.

Please note we do not have details yet as to how some of these measures will operate as the details have not been released at the time of writing this. We will provide information as it comes to hand.

Federal Measures as at Monday 30^th March 2020

JobKeeper Payment

It is worth up to $1500 a fortnight, per employee
Sole traders are eligible
To be eligible, the turnover of a business will need to have fallen by 30% or more, or in the case of a business with an annual turnover of more than $1 billion, by 50% or more. This is to be measured over a MINIMUM one-month period to comparable period a year ago
If an employee earns less than the $1,500, the government will effectively be subsidising their entire wage
If an employee earns over that, the employer will have to top it up to a maximum of $1,5000
Employee has to have been employed on March 1 to be eligible (even if stood down since that time)
The government will backdate payments to today (30^th March 2020) – payments to be released from early May
New Zealanders on the 444 visa will be included
All other temporary visa holders will not, although conversations are “under way”
It does not include superannuation
It will be delivered through existing systems at the ATO – you can apply here – https://www.ato.gov.au/general/gen/JobKeeper-payment/
It will cost $130bn over six months.

Government Fact sheet Link

JobKeeper Payment – Information for Employers

JobKeeper Payment – Overview

Boosting cash flow for employers

Key Points:

Eligibility – Small & Medium Size Business with aggregated turnover of less than $50M per annum
Enhances the 12 March 2020 measures – i.e. not additional but an enhancement
Employers to receive a payment equal to 100% of their PAYG Withholding between now and June 2020 up to a maximum of $50,000
Additionally – minimum payment is increased from $2,000 to $10,000
PLUS – in the July – October 2020 period eligible entities will receive a ‘Boosting Cash Flow’ payment equal to what they received in the March – June 2020 payment
This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments
Payments to be tax free and administered via the BAS system
So, to summarise – the cash back is now calculated on 100% of PAYGW of your wages, paid in 2 separate calculation periods:
1 Jan 2020 – 30 June 2020 – 100% of PAYGW – Min of $10,000, Maximum of $50,000
1 July 2020 – 31 October 2020 – 100% of PAYGW – Min of $10,000, Maximum of $50,000

Government Fact sheet Link

Cash flow assistance for businesses

Temporary relief for financially distressed businesses – Bankruptcy Measures

Key Points:

Safety net introduced to lessen the threat of actions that could unnecessarily push businesses into insolvency and force the winding up of the business.
The threshold at which creditors can commence insolvency proceedings to increase from $2,000 to $20,000
Temporary relief for directors from any personal liability for trading while insolvent and providing temporary flexibility in the Corporations Act 2001 to provide temporary and targeted relief from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health crisis.
The ATO will tailor solutions for owners or directors of business that are currently struggling due to the Coronavirus, including temporary reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.

Government Fact sheet Link

Providing temporary relief for financially distressed businesses

Increasing the instant asset write-off

Key Points:

Instant asset write-off threshold increased from $30,000 to $150,000
Access expanded to include businesses with aggregated turnover of less than $500M
Available until 30 June 2020

Government Fact sheet Link

Delivering support for business investment

Backing business investment

Key Points:

A time-limited 15-month investment incentive (through to 30 June 2021) which will operate to accelerate certain depreciation deductions.
This measure will also be available to 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.
As announced, this measure is proposed to only apply to new depreciating assets first used, or installed ready for use, by 30 June 2021.

Government Fact sheet Link

Delivering support for business investment

Supporting apprentices and trainees

Key Points:

Wage subsidies to support the retention of apprentices and trainees – Employers with less than 20 full-time employees may be entitled to apply 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.
Importantly, where an employer is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.
It is proposed that employers will be able to register for the subsidy from early-April 2020.