The government has announced a second major economic rescue package worth $66bn, on top of an initial $17.6 bn package and more than $100bn emergency banking measures to prevent against a credit freeze.
Framed as a “safety” package, the second wave of stimulus ramps up support for small business and also includes a major boost to welfare recipients and for people who lose work as a result of the Covid-19 pandemic.
The new suite of measures was described by prime minister Scott Morrison on Sunday as “unprecedented” and targeted at those on the front line who will be first to feel the hit of the downturn.
In total, the government has now committed economic support worth $189bn – almost 10% of GDP – and has also flagged more packages as the crisis unfolds.
The government announced in its second package that it is establishing a new, time-limited coronavirus supplement to be paid at a rate of $550 per fortnight for the next six months at a cost of $14.1bn.
This will effectively double the current rate of Newstart, which is being renamed the jobseeker payment.
The government announced in its second package that it is establishing a new, time-limited coronavirus supplement to be paid at a rate of $550 per fortnight for the next six months at a cost of $14.1bn.
This will effectively double the current rate of Newstart, which is being renamed the jobseeker payment.
The extra payment will be paid to both existing and new recipients of the jobseeker payment, youth allowance jobseeker, parenting payment, farm household allowance and special benefit.
Eligible income support recipients will receive the full amount of the $550 coronavirus supplement on top of their payment each fortnight.
The government will also waive the asset test and waiting periods to access the payment.
Yes. The government has announced that in the case of sole traders and the self-employed, anyone impacted by the economic downturn triggered by the coronavirus will be able to access the jobseeker payment and the coronavirus supplement.
Applicants will make a declaration to Centrelink that their business has been suspended or had turnover reduced significantly as a result of the downturn.
Sole traders that become eligible for the jobseeker payment will automatically meet their mutual obligation requirements during this period by continuing to develop and sustain their business.
the government announced that 6.5 million lower-income Australians would receive a one-off $750 payment aimed at boosting domestic demand in the economy, costing the budget $4.76bn.
The payment – which will be made from 31 March – will be made to all social security, veteran and other income support recipients and eligible concession card holders. This includes those on Newstart, those who have commonwealthseniors health cards, and families receiving family tax benefits.
Around half of those that will benefit are pensioners.
Under the changes announced in the second package, the government will allow individuals “in financial stress” as a result of the coronavirus downturn to have limited access to their superannuation savings, in a move costing $1.2bn.
The amount you can access will be capped at up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.
Additionally, if after 1 January 2020 you were made redundant or your working hours were reduced by 20% or more you will also be granted access.
Sole traders that have their business suspended or have a reduction in turnover of 20% or more are also eligible.
Eligible individuals will be able to apply online through MyGov for access of up to $10,000 of their superannuation before 1 July 2020.
They will also be able to access up to a further $10,000 from 1 July 2020 for another three months.
They will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or veterans’ affairs payments.
The government is also announcing a temporary reduction in superannuation minimum drawdown rates for account-based pensions and similar products.
This will be a 50% reduction in the rate for 2019-20 and 2020-21, which the government says will benefit retirees by providing them with more flexibility as to how they manage their superannuation assets.
The latest package ramps up a previous wage subsidy to small business which will be increased from a $25,000 cash refund to a maximum payment of $100,000.
The payment is open to businesses with a turnover less than $50m and also for not-for-profit charities.
In round one, the measure was worth $6.7bn. Increasing the payment to $100,000 adds an extra $25.2bn in support, bringing the total to $31.9bn.
The tax-free payment is worth 100% of the tax that small and medium-sized businesses withhold from their employees’ salary and wages up to a maximum amount of $100,000.
The amount will be paid automatically by the Australian Taxation Office based on the business’s monthly or quarterly business activity statements.
This means it will be directly linked to keeping someone employed as the tax is calculated and withheld based on a worker’s wage.
Eligible businesses that pay salary and wages will receive a minimum payment of $20,000, even if they are not required to withhold tax.
The government estimates the payments will benefit around 690,000 businesses employing around 7.8 million people and 30,000 not-for-profits.
The government has also announced a new “coronavirus SME guarantee scheme”, which will support lending to small and medium-sized businesses worth $40bn.
It will be available to all businesses with a turnover of less than $50m.
Under the proposal, the commonwealth will guarantee 50% of an eligible loan through participating banks and non-bank lenders to businesses disrupted by the coronavirus.
Loans will be used for working capital purposes and be unsecured and it will be for loans granted within six months starting 1 April 2020.
Lenders will not be charged a fee for accessing the guarantee scheme. Loans will be repayment-free for six months. The maximum that can be borrowed under the guarantee facility will be $250,000 on terms up to three years.
Yes. In the first package, the government announced that employers would receive support to keep people in jobs.
This will see $1.2bn made available as a wage subsidy of 50% of the apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020.
Where a small business is not able to retain an apprentice, the subsidy will be made available to a new employer that employs that apprentice, whether that is a large business or a registered training organisation.
The government estimates that up to 70,000 small businesses will access the incentive to support around 117,000 apprentices.
In addition the business support announced in the second stimulus, the government keeps in place incentives worth $3.9bn aimed at encouraging businesses to spend.
This includes increasing the instant asset write-off, by lifting the threshold to $150,000 (from $30,000) – and making more businesses eligible to use it.
It will also introduce a time-limited 15-month incentive to invest, by accelerating depreciation deductions.
Businesses with a turnover of less than $500m will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
The investment measures are expected to support more than 3.5 million businesses (over 99% of businesses) employing more than 9.7 million employees.
