EXPLAINER

Coronavirus stimulus packages and how they affect you

Prime Minister Scott Morrison is expected to announce more economic stimulus measures. Picture: Dion Georgopoulos.
Prime Minister Scott Morrison is expected to announce more economic stimulus measures. Picture: Dion Georgopoulos.

Governments are starting to use their fiscal firepower in a bid to protect Australians from the economic shockwaves of COVID-19.

The federal government has already announced $17.6 billion in stimulus measures targeting low-income earners, small and medium businesses and virus-affected regions.

More help for those vulnerable to the economic fall-out of coronavirus is expected soon.

In the ACT, Chief Minister Andrew Barr on Friday unveiled a $137 million to help the territory through the expected downturn to come.

We look at who these stimulus packages help, and how to access the support.

For the federal response, we focus on two of the main groups targeted with stimulus measures: low-income households and small- to medium-size businesses.

The government has designed its packages to roll out fast. That means the government is delivering them using some of its pre-existing channels for giving financial relief, such as the tax system, rather than wasting time setting up new ones.

I'm a low income earner. What help has the federal government announced, and how can I access it?

For low-income people, there is a $4.8 billion support package that comes in the form of one-off $750 payments to social security, veteran and other income support recipients and eligible concession card holders.

There will be one payment per eligible recipient, and it will be exempt from tax and will not count as income for social security, farm household allowance and veteran payments.

The one-off payment will be paid automatically from March 31 by Services Australia or the Department of Veterans' Affairs. The government expects more than 90 per cent of payments will be made by mid-April.

I have a small-to-medium size business. What help is on offer, and how can I receive it?

There's a few different forms of relief for small-to-medium size businesses. The government is using two of these measures to boost business cash flow and keep up employment.

First, in a $1.3 billion package available for small businesses, employers can receive a subsidy of 50 per cent of an apprentice or trainee's wage paid during the nine months from January 1 to September 30.

Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee, or $7000 per quarter.

They can apply through an Australian Apprenticeship Support Network provider, which will assess their eligibility. Businesses can register from early April.

The subsidy will be available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee.

Group training organisations and employers of any size who re-engage an eligible, out-of-trade apprentice or trainee will be able to receive the subsidy.

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Second, there's payments to small-to-medium size businesses available, to be made through the activity statement system.

The Australian Taxation Office will deliver the payment as a credit from April 28 as businesses lodge their activity statements.

Those that are eligible and withhold tax to the ATO on their employees' salary and wages will receive a payment equal to 50 per cent of the amount withheld, up to a maximum payment of $25,000.

Eligible businesses that pay salary and wages will receive a minimum payment of $2000 even if they don't have to withhold tax.

Under another two stimulus measures, the government is trying to encourage businesses to keep spending.

There's $700 million to let more businesses claim immediate tax deductions for assets they purchase for business use.

The federal government is increasing the threshold for the value of assets they can instantly write off from $30,000 to $150,000. It's also expanding the pool of businesses that can access the measure, lifting the threshold of annual turnover from $50 million to $500 million until June 30.

Because the threshold applies on a per asset basis, businesses can immediately write-off multiple assets, for example machinery or equipment.

In another measure aimed at keeping business spending, the federal government will use $3.2 billion to boost tax deductions for the depreciation of assets installed by businesses.

With existing tax arrangements, they can claim 30 per cent depreciation in the first year after installing an asset. Under the new measure put forward by the government, eligible businesses can claim a deduction of 50 per cent of the cost of an asset on installation. Existing deductions apply to the balance of the asset's cost.

Who's eligible? Businesses with turnover less than $500 million that purchase new, depreciable assets.

It applies to eligible assets acquired after March 12, and first used or installed by June 30, 2021.

What other support is available in the ACT and how can I receive it?

The ACT government's stimulus measures target households, local businesses and low-income people among other groups.

ACT Chief Minister Andrew Barr. Picture: Sitthixay Ditthavong.

ACT Chief Minister Andrew Barr. Picture: Sitthixay Ditthavong.

Housing ACT will make a one-off bank payment of $250 to all social housing households by June 2020. The government has said it will soon be in contact with those who are eligible.

Further advice will be directly provided and social housing tenants do not need to phone Housing ACT, Access Canberra or attend the Housing ACT shopfront about the payment.

Households receiving the utilities concession will receive an additional $200 rebate through their electricity bill, to be automatically applied to their next electricity bill in June or July 2020. Those who are eligible do not need to contact their electricity supplier.

The ACT government will also apply a $150 rebate to the fixed charge component of all residential rates bills in 2020-21, freeze the fire and emergency services levy in 2020-21 at the current level, and keep all 2020-21 vehicle registration, parking and public transport fees at the current levels.

It'll apply these measures automatically to 2020-21 rates bills, and there's no need for people to apply for them.

  • We're trying to explain the coronavirus to our readers. Send us your questions to online@canberratimes.com.au.
  • For information on COVID-19, please go to the federal Health Department's website.
  • You can also call the Coronavirus Health Information Line on 1800 020 080
  • If you have serious symptoms, such as difficulty breathing, call Triple Zero (000)

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