Stage 1 of the stimulus package includes four key parts:
Support for business investment
The first part of Stage 1 is targeted at supporting business investment. This includes an increase in the instant asset write-off threshold from $30,000 to $150,000. The instant asset write-off will be available to businesses with an aggregated annual turnover of less than $500 million (increased from $50m). This will be available from 12 March 2020 until 30 June 2020 for new or second-hand assets first used, or installed ready for use in this timeframe.
Additionally, the Government will support business investment by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50% of the asset's cost on installation. This measure will be available until 30 June 2021 and will only apply to new depreciable assets (ie. Division 40 assets).
Cash flow assistance for businesses
The second part of Stage 1 is aimed at providing cash flow assistance to businesses to help cover the costs of employee wages and salaries.
The Government has proposed a tax-free payment of between $2,000 and $25,000 to businesses with a turnover of less than $50 million (these businesses must be withholding tax to the Australian Taxation Office (ATO) on their employee salary and wages). However, this has now been superseded by its announcement of Stage 2 of the economic stimulus.
The Government has also proposed a wage subsidy of 50% for apprentice and trainee wages to eligible employers, available from 1 January 2020 to 30 September 2020.
Stimulus payments to households
The third part of Stage 1 is a one-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession card holders. The payment will be tax-free and paid from 31 March 2020.
Assistance for severely-affected regions
The fourth part of Stage 1 will assist regions severely affected by the Coronavirus outbreak and will support the tourism, agriculture and education sectors. This includes a waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks.