The Federal Government has announced a $17.6 billion stimulus package to keep businesses running, support households and the Australian economy in the face of challenges posed by the spread of the coronavirus.
The package will focus on keeping Australians in jobs and helping small and medium sized businesses to keep running.
It will be split into the following four parts; supporting business investment, providing cash flow assistance for small and medium sized businesses, targeted support for the most severely affected sectors, regions and communities and household stimulus payments.
To support businesses the Federal Government will commit $700 million to increase the asset write off threshold from $30,000 to $150,000. It will also expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
An example of an asset that may be able to be immediately written off would be a concrete tank for a builder.
There will also be a commitment of $1.3 billion to help small businesses in supporting the jobs of around 120,000 apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice or trainee’s wage for up to nine months, from 1 January 2020 to 30 September 2020.
If a small business is not able to retain an apprentice the subsidy will be available to a new employer that employs the apprentice.
Master Builders Australia have backed the stimulus package. CEO Denita Wawn said the industry needs confidence and this is a clear signal from the government they are determined to do whatever it takes.
“There are more than 380,000 small building businesses and tradies in our industry, more than any other sector of the economy, that will benefit from the government’s strong focus on backing small businesses,” Ms. Wawn said.
“Builders and tradies around the country will respond favourably to the huge boost in the instant tax write-off threshold from $30,000 to $150,000 and expansion of its eligibility to businesses with turnover under $500 million (up from $50 million).”
Ms. Wawn said incentives to invest in business assets are well targeted to the construction industry. She said there is no doubt builders and tradies will be encouraged to invest in new plant and equipment.
“However, if there is a major contraction in building activity then the benefit of these measures will be blunted. The government must take a strong leadership role in ensuring that construction of government projects currently underway continue and that projects scheduled to commence are not delayed or withdrawn,” Ms. Wawn said.
“Our industry also remains nervous about how protracted the inevitable shortage and delayed delivery of imported building products will be. This is a hit to our industry that is looming over the next few months and additional measures and extensions of some of stimulus measures may be required to help the industry weather that storm,” she said.
Prime Minister Scott Morrison said as part of the plan up to 6.5 million individuals and 3.5 million businesses would be directly supported by the package.
“Just as we have acted decisively to protect the health of the Australian people, based on the best evidence and medical advice, our support package responds to the economic challenges presented by this pandemic in a timely, proportionate and targeted way,” Mr. Morrison said.
“Our targeted stimulus package will focus on keeping Australians in jobs and keeping businesses in business so we can bounce back strongly.”
“The economy needs temporary help right now to bounce back better so the livelihoods of all Australians are protected,” he said.