government stimulus package

In light of the recent Morrison Government announcement of their $17.6 billion stimulus plan to support workers, businesses and the economy due to the significant challenges posed by the spread of the coronavirus, we have summarised the main points for SME’s.

What’s included for small or medium business owners?

Instant asset write-off

The government is increasing the instant asset write-off threshold to $150,000 from $30,000 until 30 June 2020. 

The write-off benefit will also now be extended to businesses with a turnover of up to $500 million, up from $50 million. 

For example, if you borrow money to buy business assets then you still qualify for the benefits. When a vehicle is purchased for business-use between now and 30 June, 100% of the cost can be written off immediately, essentially providing an instant 30% saving on the acquisition.

Accelerated depreciation for investments

Accelerated depreciation deductions are available for businesses with a turnover of less than $500 million. Qualifying businesses will be able to deduct an additional 50 per cent of the asset cost in the year of purchase.

Cash flow payment for employers

Eligible small businesses that withhold income tax from employee salaries and wages and pay it to the Australian Taxation Office can receive a payment equal to 50 per cent of the amount withheld, up to a maximum payment of $25,000 to help boost cash flow.

Wage subsidy for apprentices and trainees

Small businesses with fewer than 20 full-time employees who retain an apprentice or trainee can apply for a wage subsidy of 50 per cent of an apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Businesses can be reimbursed up to a maximum of $21,000 per eligible apprentice, (which is $7,000 per quarter for the first three quarters of 2020).

If you have been considering making an investment in your business, it would be worth having a discussion with your Finance Broker to explore these new government stimulus payments and incentives to see if they can help your business.