Additional Federal Government Support for Businesses

Following the worsening economic situation since the Federal Government’s initial announcement of measures to assist the economy on 12 March, below is summary of additional measures that have been announced today.

We are yet to see the legislation to enact these measures, however the Treasury has provided some detail of the announcement on their website here.

Below is a summary of the measures for businesses that have been announced. Note that for completeness, this post covers both the announcements this morning and the measures previously announced on 12 March.

Boosting cash flow for employers

The Government is providing payments of up to $100,000 to eligible small and medium-sized businesses and non for-profits (NFPs).

Eligible businesses will receive a credit of 100% of the PAYG they withhold during the March and June quarters (with a minimum payment of $10,000 and a maximum of $50,000 across the two quarters). This will be delivered as an automatic credit in the business activity statement system from 28 April upon lodging the businesses activity statement.

For employers that continue to be active, additional payments equal to half of the first payment will be delivered in the June and September quarters (taking the total payments under this initiative to at least $20,000 and up to $100,000).

To be eligible the business must have:

  • Aggregated annual turnover of less than $50 million; and
  • Be an ‘active eligible employer’ prior to 12 March 2020 (except charities that are registered with the Australian Charities and Not-for-profits Commission);

Supporting Apprentices and Trainees

The Federal Government is supporting small businesses to retain their apprentices and trainees. Eligible employers will receive a wage subsidy of 50% of their apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020 (up to a maximum of $7,000 per quarter).

To be eligible the business must:

  • Have fewer than 20 full-time employees;
  • Retain an apprentice or trainee; and
  • The apprentice or trainee must have been in training with a small business as at 1 March 2020.

Employers of any size that re-engage an eligible out–of-trade apprentice or trainee will also be eligible for the subsidy.

Employers can register for the subsidy from early April 2020 with additional information available from the Australian Apprenticeships website.

Increasing the instant asset write-off

The Federal Government has increased the instant asset write-off threshold from $30,000 to $150,000 and is expanding access to include all businesses with turnover of less than $500 million (up from $50 million) until 30 June 2020.

This higher threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets.

This increased threshold will apply to assets purchased between 12 March 2020 and 30 June 2020. The fact sheet does not reference existing small business pools, so will likely only include new assets purchased during this window.