The Federal Government has announced cash flow assistance for businesses and household stimulus payments to counteract the social and economic challenges posed by Covid-19.
The $17.6 billion stimulus package is designed to keep small businesses afloat and employees in work, and will focus on supporting the most affected sectors. The government has stated that the measures are temporary, targeted and scalable.
The package includes $700 million to significantly increase the current instant asset write-off from $30,000 to $150,000 for businesses with a turnover of less than $500 million — up from $50 million.
The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets, until 30th June.
Expanding the threshold means an additional 5300 businesses will be able to access instant asset write-offs for the first time.
Other areas of support include cash flow payments of up to $25,000 for employers, 50 per cent accelerated depreciation for investments and a 50 per cent wage subsidy for apprentices and trainees.
The Australian Tax Office will also consider relief for certain tax obligations to eligible businesses, including deferring tax payments up to four months.
According to Treasurer Josh Frydenberg, Australia is approaching the economic challenge from a position of strength, with IMF and the OECD both forecasting Australia to grow faster than comparable countries including the UK, Canada, Japan, Germany and France.
“Our plan keeps businesses operating, supports jobs and provides a stimulus to households. The government has worked hard over the last six and a half years to return the budget to balance so we have the flexibility to respond to the serious economic challenges posed by the Coronavirus,” he said.
Mr Frydenberg added that given Australia’s strong economic and fiscal position, international credit rating agency Standard and Poor’s indicated the temporary stimulus would be unlikely to strain Australia’s creditworthiness.
“By acting decisively this package will put Australia in the strongest possible position to deal with the economic challenges we face and to make sure our economy bounces back even stronger,” he said.
While Prime Minister Scott Morrison cautioned that Australia is not immune to the global Coronavirus challenge, he said his government has taken steps to prepare for “this looming international economic crisis.”
“We’ve balanced the budget and managed our economy so we can now use this to protect the health, wellbeing and livelihoods of Australians,” he said.
“Our targeted stimulus package will focus on keeping Australians in jobs and keeping businesses in business so we can bounce back strongly.”
In a statement addressing members, the Waste Management and Resource Recovery Association Australia said as an essential service, the waste and resource recovery sector is resilient.
“It is vitally important that we pull together and work with each other to ensure, as far as practicable, the continuation of our essential services to the community,” the statement reads.