Economic Stimulus Package

The Federal Government has announced a $17.6 billion economic plan to keep Australians in jobs, provide businesses with tax breaks and cashflow help as well as to provide support to Australian households as the world deals with the significant challenges posed by the spread of the coronavirus.

The Government’s economic stimulus package has four parts:

Support for business investment

• From 12 March 2020, the instant asset write off threshold is to be increased from $30,000 to $150,000 and access expanded to include businesses with aggregated annual turnover of up to $500 million (up from $50 million) until 30 June 2020.
• To increase business investment and to support economic growth by providing an investment incentive, starting on 12 March 2020 and continuing through to 30 June 2021, by accelerating depreciation deductions. Businesses with turnover of less than $500 million will increase depreciation deductions claimed on assets by 50% in their tax returns with no corresponding reduction in written down value of assets. This will not apply to second-hand assets. Eligible assets will need to be first used or installed ready for use by 30 June 2021.

 Cash flow assistance for businesses

• To help provide temporary cash flow support to employers the government will provide a tax free payment up to $25,000 for eligible small and medium-sized businesses. Businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020, will be eligible. The payments will be made based on 50 per cent of their PAYG withheld report on the Business Activity Statements or Instalment Activity Statements between 1 January 2020 and 30 June 2020, up to the $25,000 limit. Where this results in a refund, the government have advised that these will be paid within 14 days.
• To support small businesses who provide jobs to around 120,000 apprentices and trainees the government has offered a 50% wage subsidy for apprentice and trainees wages paid from 1 January 2020 to 30 September 2020. Eligible employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter). Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.

Stimulus payments to households to support growth

• A one-off $750 stimulus payment is to be made to pensioners, social security, veteran and other income support recipients and eligible concession card holders. The payment will be tax free and will not count as income for Social Security, Farm Household Allowance and Veteran payments. There will be one payment per eligible recipient. If a person qualifies for the one off payment in multiple ways, they will only receive one payment. Payments will be made from 31 March 2020 on a progressive basis, with over 90 per cent of payments expected to be made by mid-April.

Assistance for severely-affected regions

• The Government has set aside an initial $1 billion allocation to provide support to those sectors, regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education. This will include the waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks. They will also waive park entry fees for Kakadu, Uluru and Booderee National Parts for the remainder of 2020. It will also include additional assistance to help businesses identify alternative export markets or supply chains. Targeted measures will also be developed to further promote domestic tourism. Further plans and measures to support recovery will be designed and delivered in partnership with the affected industries and communities.

The Government is also offering administrative relief for certain tax obligations, including deferring tax payments up to four months. This is similar to relief provided following the bushfires and is to be assessed on a case-by-case basis.  In addition, the ATO will consider ways to enhance its presence in other significantly affected regions to make it easier for people to apply for relief, including considering further temporary shop fronts and face-to-face options.

The Government also committed an additional $2.4 billion to support our health system to manage any further outbreak in Australia and to cover 50 per cent of additional hospital costs incurred by states and territories related to the diagnosis and treatment of patients with, or suspected of having, the Coronavirus.

The Government are acting quickly to legislate the implementation of this package, however, please be aware that no legislative material is currently available.

Should you have any queries regarding the above information, please contact us on (08) 9316 7000.

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Superannuation Guarantee Amnesty

On 24 May 2018, the Government announced a 12-month Superannuation Guarantee Amnesty (subject to the passage of legislation) that was to be available for the period from 24 May 2018 to 23 May 2019.  This legislation was to provide a once only opportunity for employers to disclose and pay previously undeclared super guarantee (SG) shortfalls without incurring any penalties. However, due to the legislation not passing through parliament prior to the federal election in 2019 it never came into effect.

The government re-introduced SG Amnesty legislation to parliament on the 18 September 2019 as Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019.  Finally this legislation has passed through both Houses of Parliament and is just awaiting Royal Assent.

Since this amnesty was announced more than 7000 employers have come forward and declared outstanding superannuation guarantee shortfall amounts for their employees.  The ATO believes that there are 7000 more still to come forward.

The employers are still liable to pay the full amount of superannuation guarantee owed to their employees plus interest.  But under the Amnesty they will not incur penalties, nor the administration fee of $20 for each quarter that there is a SG shortfall and they can claim a tax deduction for the superannuation, if paid during the amnesty period.

With this re-introduced legislation came some changes to the original amnesty, including the new amnesty period, which still begins on 24 May 2018 and will now end 6 months after the day the bill finally receives Royal Assent. 

Eligibility for the Amnesty

To qualify for the amnesty an employer must:

• voluntarily disclose, in the approved form to the ATO, the amounts of SG shortfall within the amnesty period,
• disclose amounts of SG shortfall that have not previously been disclosed,
• the SG shortfall amounts must have been incurred during the disclosure period of starting on 1 July 1992 and ending 31 March 2018, and
• not be subject to an audit or review by the ATO in relation to that SG shortfall amount for the relevant periods

Payment Options

Where possible an employer should pay the SG shortfall amount and the nominal interest directly to their employees’ superannuation fund.  Where an employer is not able to pay the SG shortfall amount prior to or with the lodgment of the declaration, the ATO may be willing to work out a payment arrangement to allow the employer to pay off the debt over an agreed time period.

Warning

Employers will not be able to benefit from the amnesty for SG shortfall relating to the quarter starting on 1 April 2018 or subsequent quarters, as these are outside of the disclosure period.

Employers with SG shortfalls, who do not take advantage of the one-off amnesty will face higher penalties should they be subsequently caught – the minimum penalty is 100 per cent of the super guarantee that they owe, which will be payable in addition to the SG shortfall.

If you have an SG shortfall and need help with completing the required documentation to comply with the amnesty please contact our office on (08) 9316 7000.

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