Yesterday the Australian Government announced a range of measures to support small businesses and employees, including apprentices and trainees, to manage the impacts of the COVID-19 (coronavirus) outbreak.  The key components of the package include:

Support for business

Support is available for small and medium businesses with aggregated annual turnover under $50 million to cover the costs of employee wages and salaries equal to 50 per cent of PAYG withheld for businesses that withhold tax, with a minimum of $2,000 and a maximum of $25,000 over six months. Businesses that pay salary and wages but are not required to withhold tax will also receive the minimum payment of $2,000. This will be a tax-free payment.

Support for apprentices and trainees

Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for 9 months from 1 January 2020 to 30 September 2020. The subsidy of up to a maximum of $21,000 will be available. Where a small business is not able to retain an apprentice, the subsidy will be available to their new employer. The wage subsidy will be claimable for wages paid since 1 January 2020. Employers can register for the subsidy from 2 April 2020. Final claims for payment must be lodged by 31 December 2020.

The subsidy will be available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee. Employers of any size and Group Training Organisations that re-engage an out-of-trade apprentice or trainee may be eligible for the subsidy. The apprentice or trainee must have been in-training with a small business as at 1 March 2020.

Support for business investment

Lifting the threshold to $150,000 (from $30,000) and expanding access to businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. The threshold applies on per asset basis, so eligible businesses can immediately write-off multiple assets.

Offering businesses a 15 month investment incentive to support their business, by accelerating depreciation deductions. Key features of the incentive including deduction of 50 per cent of the cost of an asset, with existing depreciation applying to the balance of the asset’s cost. This will be available to businesses with aggregated turnover below $500 million, purchasing certain new depreciable assets.

Support for regions

Support for 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.

Full details of the package are available on the Australian Government website at https://treasury.gov.au/coronavirus