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March 12, 2020

Australia to deploy $189 billion in bid to curb economic impact of COVID-19

COVID 19 - Australian Stimulus Package

Following the Federal Government’s stimulus package announcement of $17.6 billion, the recent increase to $66 billion combined with more than $100 billion in emergency banking measures takes the total to $189 billion deployed in a bid to curb the economic impact of COVID-19.

Prime Minister Scott Morrison says these measures have been put in place to help keep Australians in jobs, business in business and ensuring the economy bounces back stronger than before.

What’s in it for individuals?

The package includes an initial payment of $750 to an approximate 6.5 million pensioners and people who receive benefits, such as parents earning less than $100,000. A second payment of $750 will also go to some welfare recipients. The first payment will roll out on 31 March directly from the tax office with the second set to roll out 10 July 2020.

The new plan will also temporarily double the Jobseeker Payment, previously called Newstart as well as allowing people access to $10,000 from their superannuation in 2019-20 and 2020-21.

How will it affect SMEs?

The package has been designed to boost cash flow and assist with paying wages, business investments and preparations for a potential economic slowdown.

The table below is a brief break-down of the stimulus package incentives, including the dates each come into effect. Further details on the incentive is also included below the table.

IncentiveDate of Effect
Two $750 payments from the tax office to pensioners and select benefit recipients

 

 

First payments will become available from 31 March 2020

Second payments will be made to eligible recipients and concession card holders on 10 July 2020

An increase in the instant asset write-off to $150,0000, and an increase of the threshold from $50 million to $500 millionApplicable to assets acquired from 12 March 2020 to 31 December 2020
Accelerated depreciation deductions for new and eligible depreciable assets (amounting to a 50% deduction in the first year)Applicable to assets acquired from 12 March 2020 to 30 June 2020
Refunds of up to 50% of PAYG withheld from wages

Applies to quarterly lodgers from 1 January 2020 to 30 June 2020;

Applies to monthly lodgers from 1 January 2020 to 30 June 2020

Wage assistance in the form of a 50% reimbursement for businesses with apprentices and traineesPayments will apply between 1 January 2020 to 30 September 2020
100% write-offAssets costing less than $150,000
Guaranteeing 50% of new bank loans up to $250,000 to SME’sApplies to offered loans taken out in 6  months from April 1 and cannot be used to refinance existing loans
Deeming rates reduced by a further 0.25 percentFrom May 1

Want to know more?

The Australian Treasury has released further details on some of the initiatives. Click the links below to learn more:

The Modoras team is still working from home and ready to assist you to make the most of Goverment stimulus measures. Make well-informed business decisions; contact us on 1300 888 803 to book an appointment with a Modoras professional.

IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (QLD) Pty. Ltd. ABN 81 601 145 215. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (QLD) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Accounting (QLD) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (QLD) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Accounting (QLD) Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability limited by a scheme approved under Professional Standards Legislation.

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