Australia: Legislative economic stimulus packages, include tax relief (COVID-19)

Australia: Legislative economic stimulus packages

Australia’s government on 23 March 2020 introduced legislative packages to implement measures announced in tranches 1 and 2 of the economic response to the coronavirus (COVID-19) pandemic.

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In this report, $ = Australian dollar

The tax measures included in the “Coronavirus Economic Response Package Omnibus Bill 2020” propose to:

  • Increase the cost threshold below which small business entities can access an immediate deduction for depreciating assets and certain related expenditure (instant asset write-off) from $30,000 to $150,000—from 12 March 2020 to 30 June 2020
  • Provide access to an instant asset write-off for entities with an aggregated turnover of $10 million or more, but less than $500 million (up from the existing cap of $50 million)
  • Make the instant asset write-off available for depreciating assets and certain related expenditure costing less than $150,000—from 12 March 2020 to 30 June 2020
  • Temporarily allow businesses with aggregated turnover of less than $500 million in an income year to deduct depreciation expenses at an accelerated rate subject to certain conditions
  • Establish legislative authority for government spending on new measures to assist employers to retain apprentices and trainees and to provide financial assistance to participants in the Australian aviation sector
  • Allow individuals affected by the adverse economic effects of the coronavirus to have up to $10,000 released from their superannuation or retirement savings account on compassionate grounds
  • Increase the low-income threshold for individuals and families (including the dependent child-student component of the family threshold)

Another package—the “Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Bill 2020”—proposes to provide that the Commissioner of Taxation make cash-flow “boost payments” to eligible entities.

Tranche 2

The government announced further economic support measures on 22 March 2020 to further its tranche 1 stimulus package and the action taken by the Reserve Bank of Australia. The measures are designed to “cushion the economic impact of the coronavirus” and provide minimum payments for eligible small and medium-sized businesses, and not‑for-profits (including charities) that employ people.

More information is available on the Treasurer’s website.

Read a March 2020 report prepared by the KPMG member firm in Australia

Victorian government announces stimulus, tax relief measures

The Victorian state government announced an “economic survival and jobs package” to assist the local economy during the COVID-19 pandemic. The Victorian package, among other items, would:

  • Provide full payroll tax refunds for the 2019-20 financial year to small and medium-sized businesses with payroll of less than $3 million
  • Defer payroll tax for eligible small businesses the first three months of the 2020-21 financial year until 1 January 2021
  • Defer 2020 land tax payments for eligible small businesses

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