Government Response to COVID-19

Posted on March 25, 2020 by admin

As you are no doubt aware, business and markets have been hit remarkably hard with a flash crash with coronavirus causing uncertainty that has not been since 1987. While the world and certainly the financial markets begin to panic, our team at Insight strongly believe this situation will not have a medium or long-term structural impact on the Australian and global economy. We believe this is a relatively short-term impact due to the consolidated global response of containing the virus. Yes, there is a huge impact on business and financial markets, but we believe the markets will bottom out when we hit the maximum turning point of confirmed global COVID-19 estimated over the next 1-2 months.

Regardless of our view, we have taken the pandemic seriously. We have this week asked all staff to work from home and have scheduled our meetings to be conducted online. I have detailed below the response from the Australian Government to business owners and added comments in plain English.

As a business owner, you may want to develop a workplace response to coronavirus. You’ll want to have a plan on how to look after or protect your staff, how to manage sick leave and self-isolation plus consider issues around privacy.

The Australian government has announced a $22.9 billion economic stimulus package, with the goal to support Australia’s health, jobs and livelihoods and set up Australia to bounce back.

The stimulus package to support business and recharge the economy includes the following programmes:

• Boosting Cashflow for Employers – Temporary cash flow support for small businesses that employ staff. Payments will be a minimum of $2,000 and up to $25,000 tax-free, for eligible businesses. In plain English, the ATO will refund 50% of your PAYG (tax on wages) to maximum of $25,000.

 

• Increasing the Instant Asset Write-Off – Increasing the instant asset write off threshold from $30,000 to $150,000 until 30 June 2020. In plain English, if you buy a car, or capital items greater than 30k less than 150k we can expense this 100%.

 

• Supporting Apprentices and Trainees – Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid from 1 January 2020 to 30 September 2020.

 

The government’s business site has useful information on support for Australian businesses. You can access the site here.

Practically, you don’t need to do anything. The refunds will occur in your monthly or quarterly BAS for March – June 2020.

We remain extremely grateful for your business, and are committed to working with you through this unsettled time. If you’re unsure or have any questions at all, shoot us an email and we can give you a call to discuss how we can help.

 

Kind Regards,

Christopher Fellas

+61 2 9181 3431