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The Australian Government announces economic response to COVID-19

By | March 13, 2020

This week, the Australian Government announced an economic response totalling $17.6 billion.

Australia’s economy is resilient, and we are well placed to navigate the economic implications arising from the Coronavirus.

We applaud the Australian Government for acting decisively in the national interest to address the potentially significant economic consequences of the virus, without a permanent or structural impact on the budget balance.

How will this economic response help the current situation?

A $17.6 billion package will represent fiscal support across the forward estimates of 0.9% of annual GDP.

The Government’s response tailored to the nature of the shock is as follows:

  1. Delivering support for business investment:
  • The Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses of an aggregated annual turnover of less than $500 million (up from $50 Million) until 30 June 2020.
  • The Government is also introducing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth. Businesses that turnover less than $500 Million will be able to deduct 50% of the cost of an eligible asset.
  1. Cash flow assistance for businesses:
  • The Boosting Cash Flow for Employers measure will provide up to $25,000 back to small and medium-sized businesses, with a minimum payment of $2,000 for eligible businesses.
  • Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage for up to 9 months from 1 January to 30 September 2020.
  1. Stimulus payments to households to support growth:
  • The Government will provide a one-off $750 payment to social security, veteran and other income support recipients. If a person qualifies for the one-off payment in multiple ways, they will only receive one payment.
  1. Assistance for severely affected regions:
  • This measure provides $1 Billion to support those most significantly affected by the Coronavirus outbreak. Including those heavily reliant on industries such as tourism, agriculture and education.

The below summary provides a more comprehensive view of the economic response in relation to the Coronavirus:

Table provided by Australian Government Economic Response to Coronavirus fact sheet.

If you would like a more thorough overview of how this initiative could impact you and your business, contact our Business Advisors on (08) 8172 1444 or enquiries@altitudeadvisory.com.au.

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