Retailers from across Australia have welcomed the federal government's stimulus package announced this week, as it looks to help the economy through the coronavirus outbreak as it continues to escalate across the globe.
The National Retail Association chief executive Dominque Lamb says that measures aimed to protect businesses during this period of extreme economic uncertainty are essential.
“With numerous economists forecasting that the uncertainty generated by Coronavirus could tip the Australian economy into recession, measures to assist business could not come a moment too soon,”she says.
“Retailers will particularly welcome the increase to the instant asset write-off. This is a measure the NRA has been advocating for and is welcome news to SMEs across the country."
The World Health Organisation (WHO) officially declared Coronavirus a pandemic, leading to concerns that both the Australian and worldwide economy will take a hit.
The Australian Government will introduce a package of Bills to Parliament in the week beginning March 23 for these measures to come into effect.
The Prime Minister and Treasurer announced a range of initiatives to combat the virus, including instant asset write-off threshold extended from $30,000 to $150,000, with turnover for eligible businesses extended from $50 million to $500 million until 30 June 2020.
A 15 month investment incentive was also announced for businesses with a turnover of less than $500 million to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules to apply.
The government will give a payment of up to $25,000 for eligible SMEs with a turnover of less than $50 million that employ staff, and a 50% wage subsidy for eligible businesses that employ trainees or apprentices for up to nine months from 1 January 2020 to 30 September 2020.
Further initiatives include a one-off $750 payment to social security, veteran and other income support recipients and eligible concession card holders, and a $1 billion payment to communities significantly affected by the coronavirus. This includes measures such as the waiver of fees and charges to tourism businesses in certain regions, assistance to help business find alternative export markets or supply chains, and administrative assistance from the ATO to affected businesses.
“The measure to accelerate depreciation deductions will encourage short-term business investment and spur economic growth which will be absolutely pivotal in averting a recession," says Lamb.
“Managing cash flow will be a major challenge for businesses in the coming period. Providing a stimulus payment to SMEs, coupled with the wage subsidy for trainees and apprentices, will help combat a decline in business confidence and help keep many retailers heads above water," she explains.
“Ensuring that consumers keep spending is vital and the stimulus payments to lower income Australians will hopefully achieve that. We urge all Australian's receiving this payment to not shy away from spending it at the shops to support jobs in retail."
The NRA has already advocated for assistance to businesses hit by the Coronavirus outbreak. Retailers in communities reliant on industries such as tourism have experienced a severe knock-on effect.