Unpacking the Coronovirus Stimulus Package for small businesses
- March 19th, 2020
- 2 mins READING TIME
The Coronovirus has impacted all sectors of the Australian economy. Small businesses that do not necessarily have the balance sheet to survive, have been particularly hard hit.
To help them navigate through this trying time and to keep people employed, the Australian Government has announced a Coronovirus stimulus package. Whilst welcome, there remains much confusion around how this new stimulus package can be applied or claimed.
Key areas of support
We’ve unpacked the Coronovirus Stimulus Package into layman’s terms to make it easier for you to understand. Download our Coronovirus Stimulus Package Unpacked Guide to keep handy as a quick go to reference.
Briefly, the key areas of support for small businesses directly employing people include:
- A cashflow payment of up to $25,000
- 50% wage subsidy for apprentices and trainees
- An increase in the instant asset write off threshold to $150,000
- 50% accelerated depreciation for investments
Sole Traders are losing out
Sole traders – who account for more than 60% of Australian business – are short changed. Because they do not employ staff directly, they are not able to access the cash flow support being offered and they therefore remain at risk.
We remain hopeful that the Government will announce additional stimulus measures for sole traders, similar to the recent measures announced by New Zealand’s wage subsidy scheme. The scheme provides eligible businesses, including sole traders and self-employed people with $585 per week for each full-time employee, for a period of 12 weeks. With this wage subsidy scheme, employers can receive a maximum benefit of $150,000.
A note of caution
The Government’s stimulus package is still a work in progress. So a note of caution, talk to your financial advisor to discuss how you can submit your applications and maximise the benefit from the Coronovirus Stimulus Package.