Covid-19 has impacted all nations on an unprecedented scale. Each government has reacted differently, with responses ranging from massive economic stimuli to a less interventionist approach.
By the end of March 2020, the Morrison government here in Australia had announced stimulus spending of $213 billion, an unprecedented amount, dwarfing even the Rudd/Gillard governments’ spending after the 2008 financial crash.
Subsequently, in an Economic & Fiscal update in July, the Treasury Minister Josh Frydenberg confirmed that the total amount of stimulus spending had reached $289 billion.
The ongoing stimulus is designed to help support the economy during the crisis, help individuals in need, and help small and medium-sized companies stay in business.
The initial announcement in March highlighted four key priorities for the economic support that became available, and these have remained the core priorities ever since:
- Business investment – to encourage businesses to keep investing by enabling them to bring investment plans forward and thus provide a boost to the economy.
- Cashflow assistance for businesses – designed to help keep businesses running, on the premise that it’s much easier, in the long run, to keep existing businesses running as far as possible, rather than rebuilding new companies from scratch once the impact of the virus has ended and things return to ‘normal’.
- Support for specific regions and business sectors – specifically targeting areas of the country struggling pre-Covid-19, together with business sectors that could be adversely affected, such as those with a high dependency on tourism, leisure, and entertainment.
- Household stimulus – with an awareness of the impact of the virus on individuals and families, providing a level of support for those out of work or unable to work, alongside plans to encourage continued individual spending to keep the economic wheels turning.
Let’s consider the stimulus package, and subsequent announcements of extra support, in the context of three specific headings that may be particularly relevant to expat Brits working in Australia.
1. If you’ve lost your job or are not working
To support employees who have lost their job, or who have seen their hours reduced, access to the Job Seeker allowance has expanded to include sole traders, the self-employed, and those who have been temporarily standing down from their job. The government has also relaxed some of the eligibility conditions that could have previously precluded many from being able to claim.
Additionally, they’ve introduced a ‘coronavirus supplement’, payable up to the end of October.
The administration has also made two ‘Economic Support Payments’ of $750 to those receiving the Job Seeker payment. The two payments came in March and July, and there are currently no confirmed plans for any further payments.
As well as income support, the stimulus plans also give you early access to your Superannuation fund so you can draw down some emergency funds to tide you over. At this stage, you can take out $10,000 before 24 September.
2. If you’re a business owner
As well as support for individuals, there has also been a series of measures designed to help businesses remain functioning and to continue to invest for future growth.
The key measure announced was a new ‘Job Keeper’ payment. Eligible employers can receive $1,500 per employee, per fortnight, to enable them to keep staff. The original announcement was for Job Keeper to last until July 2020, but it has recently extended to the end of March 2021.
The Job Keeper payments also include part-time and casual employees, as long as they have been with the employer for twelve months. Sole traders could also be eligible for the Job Keeper allowance.
The government also introduced tax-free cashflow boosts – automatic payments through the ATO of between $25,000 and $100,000 depending on the size of the company. When subsequent activity statements get lodged, further payments will trigger.
No forms are required for these boost payments – they are automatically credited to your account after statements get lodged. The payments are not treated as income.
Two other smaller measures announced were an increase in the asset write off threshold from $30,000 to $150,000, and an extension of the period to write off depreciation deductions.
3. If you’re building a new home
As a means of providing direct support to the building sector as well as supporting those building new homes, the government also announced a new ‘Homebuilder grant’ of up to $25,000 for anyone building a new home or substantially renovating an existing one.
These grants are available at an individual state level.
Here’s a link where you can check the full eligibility criteria.
As you can see, the Australian government has been, and is still doing, a lot to try to ensure that businesses and employees have the financial means to survive the Covid-19 virus, and be in a position to move forward once it’s safe to do so. Additionally, each of the states has announced Payroll Tax reliefs to help employers.
With all these announcements, the situation is fluid. As we’ve already mentioned, the impact of Covid-19 is unprecedented, so it’s likely that the government response will continue to be dynamic, with new announcements made as new consequences start becoming apparent.
Keep an eye out in the media for new announcements. It’s also worth speaking to your accountant or financial adviser for more details and support. Get in touch to find out how we can help.