Nearly half of the federal government’s $17.6 billion economic stimulus package has been directed to SMEs with measures including a 50 per cent wage subsidy for up to 117,000 apprentices, increases to asset write-off cut-offs, and an automatic up to $25,000 tax-free grant for businesses turning over a maximum of $50 million a year.
Prime Minister Scott Morrison said the measures have been designed to boost cash flow and keep businesses operating and employing people as the ongoing COVID-19 outbreak continues to hit economies, businesses and supply chains worldwide and fend of Australia sliding into a recession.
Also included is a $750 one-off payment for pensioners and others on government benefits.
Print and Visual Communication Association CEO Andrew Macaulay said while the measures are expansive they fail to deliver immediate operating cost relief for printers.
“PVCA supports all assistance to SME printers, however when cash flow is the issue we are disappointed that the federal government has not done more to offset operating costs immediately, thus stimulating the economy. The package is expansive but underwhelming for immediate practicality,” Macaulay told Sprinter.
Morrison, in announcing the measures, said they were about easing cash flow issues in the short-term.
“These measures are heavily focused on understanding that it is businesses that keep people in jobs and those businesses will confront challenges when it comes to cash flow and demand impacts particularly in the short term that need to be addressed by this package,” Morrison told reporters.
Morrison said the measures are designed to support cash flow, boost investment, and provide immediate demand stimulus to the Australian economy.
Treasurer Josh Frydenberg said keeping cash flow positive for SMEs was imperative for the nation’s economy.
The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax free.
“The first is a payment of up to $25,000 to businesses that employ people and have a turnover of up to $50 million. The payment will be delivered automatically through the tax system so no new forms will be required. These payments are tax free,” Frydenberg said.
“This measure will benefit around 690,000 businesses employing around 7.8 million people. Businesses will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.
“The second is a 50 per cent wage subsidy for apprentices and trainees with businesses with less than 20 employees. Employers will receive up to $21,000 per apprentice and 117,000 apprentices will have additional job security as a consequence of this measure. These two measures which cost around $8 billion are designed to keep businesses in business and Australians in a job.
“The government will also deliver a one-off stimulus payment to households with 6.5 million Australians receiving a payment of $750.”
The federal government has also directed $700 million to increasing the instant asset write off threshold from $30,000 to $150,000 and expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
Another measure includes $3.2 billion to back business investment by providing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short-term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase.
Image courtesy of: Scott Morrison Facebook page
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