COVID 19: GOVERNMENT STIMULUS PACKAGE
The Government has today announced a range of stimulus support for employers and employees, as a result of the COVID-19 impacts on business. The stimulus amounts to $12.1bn, which is around 4% of GDP.
We will be working through the detail of the specific policies and how they could potential positively impact on our clients businesses. However in the meantime we have summarised the key points below:
STIMULUS PACKAGE DETAILS
$5.1b wage subsidy
- Full time up to $585 a week (20 hours or more) for up to 12 weeks
- Part time up to $385 a week (less than 20 hours) for up to 12 weeks
- Paid as lump sum, up to maximum of $150,000 per business to retain employees
- Business have either suffered or projected to suffer a 30% decline in revenue compared to last year for any month between January and June 2020. Applications can be made on the basis of forecast revenue decline
- Must declare, on best endeavours, that will continue to employ affected employees at minimum of 80% of their income for the duration of the subsidy period
- Employers sign declaration that have taken active steps to mitigate the impact of COVID-19 (IE: engaged with Bank/Financial Advisor/Accountant)
- Applications to Ministry of Social Development
- Available from Today (17 March 2020) and applications can be made up until 9 June 2020
- Money to be paid out within 5 days
Sick Leave expected cost of $126m
- Same cash as above
- Made available for workers or contractors in self-isolation for 14 days
- Will pay out entire sickness period if infected
- Not available for those who can work from home
- Employers must still meet normal sick leave and employment obligations
Support Package for Beneficiaries ($2.9bn)
- Permanent boost of $25 a week for main benefits ($2.4bn)
- Removal of hours requirement for In Work Tax Credit associated with Working for Families.
- Double the Winter Energy Payment for main beneficiaries. Worth $900 for singles and $1,400 for couples ($480m)
$2.8b package for business
- Interest waived on some late tax payments - where taxpayer can prove cash flow impacts from COVID-19
- More deductions for low value assets - threshold increasing from $500 to $5,000 for 2020/21 and then permanently to $1,000 from 2021/22
- Depreciation for commercial & industrial buildings - Depreciate buildings at 2% diminishing value starting from the 2020/21 tax year
- Higher provisional tax threshold $5k (was $2.5k) - providing some timing benefit around tax payments
$500m for the health system to increase intensive care support
$600m for aviation sector
WE ARE HERE TO HELP
If you have concerns about the COVID-19 impacts on your business or want to know more about how the above stimulus package could help your business, please contact the All Accounted For team.
Email: admin@aafl.nz
Phone: 04-970-1182
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