The Prime Minister released details of the second round of the Government’s economic plan to combat the impact of the coronavirus outbreak. The new economic plan will provide significant benefits to SME businesses and households in addition to the stimulus package announced on 12 March 2020. These new measures together with the previous stimulus package will need to be legislated when the Parliament returns later today.
A total of $189 billion will be injected into the economy. This includes $17.6 billion for the Government’s first economic stimulus package (see our article issued 12 March 2020), $90 billion from the RBA, $15 billion from the Government to deliver easier access to finance and $66.1 billion in yesterday’s economic support package.
The economic support package includes:
- Assistance for businesses to keep people in a job;
- Support for households including casuals, retirees and those on income support; and
- Regulatory protection and financial support for businesses
Assistance to Employers
Boosting Cash Flow for Employers
The Government will provide up to $100,000 to eligible small and medium-sized businesses, and not‑for-profits (including charities) that employ people, with a minimum payment of $20,000. These payments will help businesses’ and not-for-profits’ cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.
Under the enhanced scheme from the first package, employers will receive a payment equal to 100% of their salary and wages withheld (up from 50%), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000. The payment will be available from 28 April 2020.
The payments are tax-free, there will be no new forms and payments will flow automatically through the ATO. This measure should benefit around 690,000 businesses employing around 7.8 million people, and around 30,000 NFPs (including charities).
Small and medium business entities with aggregated annual turnover under $50 million and that employ workers will be eligible. NFPs entities, including charities, with aggregated annual turnover under $50 million and that employ workers will now also be eligible. This will support employment at a time where NFPs are facing increasing demand for services.
An additional payment is also being made from 28 July 2020. Eligible entities will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments received.
Support for Workers and Households
The Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited coronavirus supplement to be paid at a rate of $550 per fortnight. This will be paid to both existing and new recipients of the JobSeeker Payment, Youth Allowance JobSeeker, Parenting Payment, Farm Household Allowance and Special Benefit.
The Coronavirus Supplement will be paid for the next 6 months. Eligible income support recipients will receive the full amount of the $550 Coronavirus Supplement on top of their payment each fortnight.
An increase of up to 5,000 staff for Services Australia will assist to support the delivery of new Government measures.
Payments to Support Households
In addition to the $750 stimulus payment announced on 12 March 2020, the Government will provide a further $750 payment to social security and veteran income support recipients and eligible concession card holders, except for those who are receiving an income support payment that is eligible to receive the Coronavirus Supplement.
This second payment will be made automatically from 13 July 2020 to around 5 million social security, veteran and other income support recipients and eligible concession card holders. Around half of those that benefit are pensioners.
The first payment will be made from 31 March 2020 to people who will have been on one of the eligible payments any time between 12 March 2020 and 13 April 2020.