The 2020 Federal Budget identifies an additional $74 billion in spending measures designed to support business (and create jobs) under the Job Maker Plan. These measures bring the Government’s overall response and recovery support to COVID19 to more than $507 billion since the onset of the pandemic, half of which has been provided in the form of direct economic support to businesses (and their employees).
The new JobMaker measures are designed to encourage business growth and support the restoration of jobs lost due to the COVID19 economic downturn. Some of the measures announced by the Federal Treasurer, the Hon, Josh Frydenberg MP, during his budget speech included:
- more than $50 billion in tax relief to households and businesses to promote increased household spending and, in turn, create jobs
- increasing the Government’s infrastructure investment pipeline by $10 billion to $110 billion over ten years
- $4 billion to support a new Job Maker Hiring Credit to give businesses incentives to take on additional employees that are aged 16 to 35 years old
- $1.2 billion to support 100,000 new apprentices and trainees via the provision of a 50 per cent wage subsidy for these appointments
- $240.4 million through the Women’s Economic Security Statement.
“Three of the measures announced under the $74Billion expansion of the Job Maker Plan are most relevant for businesses as they strive to recover from the COVID19 Economic Downturn, said ACAPMA CEO Mark McKenzie.
“The first is the immediate expansion of the Instant Asset Write-off measure, allowing businesses with annual turnover of up to $5B to fully depreciate investment on assets of any value between now and 30 June 2023, added Mark”.
The second is the new Job Maker Hiring subsidy which will provide eligible business owners with a wage subsidy (i.e. $200 per week for new workers 16-29 years of age and $100 per week for workers 30 to 35 years of age) – for a period of 12 months following their commencement. Importantly, the subsidy will be paid to the business – not the employee.
Eligible employees must work an average of 20 hours per week and must have been receiving either the Job Seeker payment (or the Youth Allowance) for at least one month in the three-month period prior to their employment.
“Eligible businesses must not currently be receiving the Job Keeper payment and the new appointment must be made between now and October 2021 and represent an increase in the total number of employees (relative to the period prior to 30 September 2020)”, said Mark.
The third initiative is the provision of a temporary capacity for business owners to carry-back their losses to offset tax paid on profits in previous financial years. This allows businesses that were previous profitable, but now making a loss, to offset this loss and receive a tax refund, to help boost cash flow and invest.
This scheme is available to all businesses with annual turnover under $5 billion. Any business losses made in the 2019-20, 2020-21 or 2021-22 financial years can be carried back to offset the tax paid on profits in the 2018-19 financial year (or profits made after this time). Companies can claim this offset in either their 2020-21 or 2021-22 tax return and receive a tax refund.
“While each of these business support measures may appear relatively modest in isolation, when considered in aggregate they create a climate of confidence for business at a time when most business owners are struggling with unprecedented uncertainty”, said Mark.
“For that reason, alone, the business assistance measures announced in the Federal Budget are very welcome”, concluded Mark.
ACAPMA members wanting more information on how these initiatives might apply to their own business should contact the ACAPMA Secretariat by sending an email to firstname.lastname@example.org