The Treasury Laws Amendment (2020 Measures No. 3) Bill 2020, which includes several amendments to the government’s Coronavirus Economic Response Package, has been tabled by the House of Representatives.
The amendments move to extend the $150,000 instant asset write-off threshold for another six months until 31 December 2020.
Last week, the Treasurer announced that businesses earning up to $500 million per year will have an extra six months to write off newly purchased assets worth up to $150,000.
By extending the previous end date of 30 June 2020 to 31 December 2020, the amendments give businesses additional time to access the $150,000 instant asset write-off for their investments, including those investments that have been delayed by supply-chain disruptions.
“What we want to do now, at a time when people are getting back to work and maybe demand is a bit slower than it was pre-crisis, is to encourage businesses to go out and to grow and to invest and to hire, and this is one of the measures to do just that,” Treasurer Josh Frydenberg told Sky News last week.
According to the explanatory memorandum, the aim of this particular amendment is to extend cash-flow support to businesses through the early stages of the recovery from the economic conditions caused by the coronavirus.
The Treasury Laws Amendment (2020 Measures No. 3) Bill 2020 also moves to clarify the Boosting Cash Flow for Employers Act 2020, ensuring that entities that are required to pay amounts under Division 13 in Schedule 1 to the TAA 1953, in relation to alienated personal services payments received in these periods, are entitled to the cash-flow boost.
It also ensures that entities that may have received a cash-flow boost payment from the ATO on the basis of reporting that does not distinguish between amounts withheld under Subdivisions 12-B, 12-C and 12-D in Schedule 1 to the TAA 1953 and amounts payable under Division 13 in Schedule 1 to the TAA 1953, are not required to repay these amounts.
Reduction in 2020–21 PAYG instalments
The bill also foresees the reduction of GDP adjustment factor for the 2020–21 income year to nil, to coincide with the government’s announced suspension of indexation of PAYG and GST instalment amounts for that period.
Under the new law, the GDP adjustment factor used by the commissioner to work out PAYG instalments under the quarterly instalment amount method for the 2020–21 income year will be zero per cent.
Further, the commissioner will apply the reduced GDP adjustment factor to work out the amount of GST instalments payable by small-business entities in the 2020–21 income year.