Federal stimulus to support home building during pandemic
March 15, 2020
A range of stimulus measures to support business during the COVID-19 pandemic were announced last week by the Federal Government including:
- A wage subsidy of 50 per cent of apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020 for eligible employers.
- An increase to the instant asset write-off threshold from $30,000 to $150,000, plus access to the program for businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
- Accelerated depreciation deductions so businesses with less than $500 million turnover can deduct an additional 50 per cent of the asset cost in the year of purchase until 30 June 2021.
- A “Boost Cash Flow for Employers” incentive of up to $25,000 with a minimum payment of $2,000 for eligible small and medium-sized businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax free. Businesses will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.
HIA Chief Economist Tim Reardon welcomed the stimulus package, particularly the support provided for apprentices.
“The measures announced today will assist in stimulating household demand and prevent a further slowdown in building activity,” he said.
“Apprentice employment is typically an early casualty during periods of economic downturn and this support for small businesses will ensure that fewer are lost during this cycle.
“The extension of the instant asset write off scheme to businesses with a turnover of up to $500 million, and to an asset value of up to $150,000, will also assist small businesses in the construction industry.
“Similar measures enabling accelerated depreciation have been effective in increasing capital investment in the past.”
The Prime Minister’s media statement can be read here.
HIA will provide more details to members about these measures over coming weeks.