Economic Response to COVID-19 Pandemic

17/03/2020 12:00am

The impact of the Coronavirus or Covid-19 global pandemic continues to evolve and the advice to businesses on how to respond is constantly being updated.

As the Federal Government has said, Australia is not immune to COVID-19. Last week it unveiled a multi-billion dollar stimulus package to help counteract the negative impact the virus will have on the Australian economy, with an anticipated 0.5% drop in GDP for the March 2020 quarter.

It's anticipated that additional stimulus measures to support specific sectors will also be unveiled soon.

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While some industries will be more directly impacted by COVID-19, including health, aged care, education and tourism, and international travel and trade are suspended, all industries will face issues around supply chains, workforce, and cash flow.

Hood Sweeney is taking every precaution to mitigate the risk of spreading the virus.

We encourage that where possible all meetings for the foreseeable future be held via telephone or other virtual methods, such as Skype, rather than face to face.

And like many businesses, we have ensured we have the technology in place to allow staff who are able to work remotely to do so.

But we want to assure that we are here for our clients, to assist and advise as always. While markets are volatile and the risk management of COVID-19 is changing by the hour, we remain calm and considered in our approach.

If you need information around business continuity, cash flow, finance# and investments*, workforce issues or Technology services, Hood Sweeney is here for you.

Please contact your relationship manager by phone on 1300 764 200.

Among the headlines, the State and Federal Governments have announced cash injections outside of the scheduled budget process.

The Australian Government unveiled a $17.6B economic stimulus package, on top of South Australia’s $350M cash injection, to safeguard jobs and ensure the economy can bounce back from this global pandemic.

Premier Steven Marshall said the State’s “unprecedented stimulus” will go to funding infrastructure projects, both new and some that can be brought forward and begin immediately, ranging from maintenance, housing and tourism infrastructure projects to those that are health-related.

“Our criteria are projects that can begin immediately,” he said, adding that projects that maximise South Australian employment and goods and services made or produced in SA are a key priority.

The Morrison Government announced Australia’s fiscal stimulus package which will be introduced into Parliament at the next sitting (week commencing Monday, 23 March).

Prime Minister Scott Morrison said: “This plan is about keeping Australians in jobs. This plan is about keeping a business in business,” with a particular focus on small and medium-sized businesses.

It’s about “ensuring the Australian economy bounces back strongly on the other side”.

The proposed measures

Any business with an annual turnover of less than $500M will be entitled to:

  • Instant Asset Write-off – will be increased from $30,000 to $150,000 from 12 March 2020 until June 2020
  • Asset investments – a 50% instant deduction for the costs eligible (new) assets upon installation with existing depreciation rules applying to the balance of the asset cost until 30 June 2021.

Any business with an annual turnover of less than $50M that employs staff will be entitled to:

  • Tax-free payment: a $2,000 – up to a maximum $25,000 tax-free payment that is equal to 50% of PAYG withheld from salaries and wages over six months.

A business that employs apprentices or trainees will be entitled to (they must have less than 20 full-time employees):

  • Tax-free payment: a wage subsidy of 50% (up to a maximum of $21,000 per trainee/apprentice) of the apprentice or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020.

Lower-income Australians will be entitled to:

  • One-off payment: a one-off tax- free payment of $750 to social security, veteran and other income support recipients and eligible concession cardholders.

Regions affected by COVID-19 will be entitled to:

  • Initial $1B allocation: in support of regions and communities that have been disproportionately affected by the economic impacts of the coronavirus – including those heavily reliant on tourism, agriculture, and education.

If you need information around business continuity, managing cash flow, finance#, and investments*, workforce issues or Technology services, Hood Sweeney is here for you.

Please contact your relationship manager by phone on 1300 764 200.


* Services provided by Hood Sweeney Securities Pty Ltd AFSL No. 220897 
# Services provided by Hood Sweeney Finance Pty Ltd Australian Credit Licence No. 391396

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