The Commonwealth Government has announced a third stimulus package worth $130 billion on top of the $66.1 billion and $17.6 billion stimulus packages to combat the effects of Coronavirus (COVID-19) on Australia’s economy. The raft of measures are aimed at supporting business investment, cash flow assistance, providing assistance for severely affected regions, support for households including casuals, sole-traders, retirees and those on income support, assistance for businesses to keep people in a job and regulatory protection and financial support for businesses to stay in business which will be rolled out in the coming weeks and months.
Support for Business
The Government has announced a $130 billion JobKeeper payment to help keep more Australians in jobs and support businesses affected by the significant economic impact caused by the Coronavirus. Around 6 million workers will receive a fortnightly payment of $1,500 (before tax) through their employer.
Information for Employers
If your business has been significantly impacted by the Coronavirus you will be able to access a wages subsidy to continue paying your employees. Under the JobKeeper program, you will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum of six months. This assistance will help you keep staff and will help you restart when the crisis is over.
Information for Employees
The JobKeeper payment helps businesses significantly impacted by the Coronavirus cover the costs of their employees’ wages, so more Australians can retain their jobs and continue to earn an income. Your employer will notify you if they intend to claim the fortnightly payment of $1,500 on your behalf.
As at 22 March, the Government is now providing 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. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff. The payment will be tax free.
Increasing the Instant Asset Write-Off (IAWO)
The Instant Asset Write-Off threshold has been increased from $30,000 to $150,000 and access has been expanded to include businesses with aggregated annual turnover of less than $500 million (up from $50 million). This applies from 12 March 2020 until 30 June 2020 for new or second-hand assets first used or installed ready for use in this time frame.
Backing Business Investment (BBI)
A time limited 15-month investment incentive to support business investment and economic growth over the short term by accelerating depreciation deductions. This applies to eligible assets acquired from 12 March 2020 and first used or installed by 30 June 2021. Businesses with a turnover of less than $500 million 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 cost.
Coronavirus SME Guarantee Scheme
The Government will establish the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SMEs) to get access to working capital to help them get them through the impact of the Coronavirus. Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs.
For more information visit SME Guarantee Scheme.
Providing Temporary Relief for Financially Distressed Businesses
The Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive. The package also includes temporary relief for directors from any personal liability for trading while insolvent. The Corporations Act 2001 will be amended to provide temporary and targeted relief for companies to deal with unforeseen events that arise as a result of the Coronavirus.
Supporting Apprentices and Trainees
If you employ an apprentice or trainee, you may be eligible for a wage subsidy of 50% of their wage paid from 1 January 2020 to 30 September 2020. You can register for the subsidy from early April 2020.
Regional Growth Fund
The opening of the third funding round of the Regional Growth Fund has been brought forward to help provide economic stimulus and unlock new economic activity. Projects should foster collaboration and demonstrate a commitment to local employment and purchase local supplies wherever possible. Applications will be accepted from local government bodies, incorporated associations and business clusters. Closes 11 May 2020.
Measure to Help Renters
The Prime Minister also announced new measures to help renters. Under these measures, evictions will be put on hold over the next 6 months for commercial and residential tenants in financial distress, who are unable to meet their commitments due to the impact of the Coronavirus.
For more information please visit Measures to Help Renters.
The Australian Government has today announced a $110 million initiative securing freight access for Australia agricultural and fisheries exporters.
For more information please visit agriculture.gov.au.
Support for Individual 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 job seeker, 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.
Australians applying for Centrelink can now get support if their partner earns up to $79,762, Scott Morrison announced on Monday. The PM said the government has boosted the threshold from about $48,000, which would allow more Australians to receive support during the Coronavirus pandemic. The change means an applicant’s rate of welfare won’t be affected unless their partner earns more than $79,762 a year.
Suspension of Mutual Obligations
The Government will continue the suspension of mutual obligation until 27 April 2020 to support job seekers through this difficult period
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.
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.
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.
Early Release of Superannuation
The Government will allow individuals in financial stress as a result of the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.
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.
Temporarily Reduce Superannuation Minimum Drawdown Rates
The Government is temporarily reducing superannuation minimum drawdown requirements for account based pensions and similar products by 50 per cent for 2019-20 and 2020-21. This measure will benefit retirees by providing them with more flexibility as to how they manage their superannuation assets.
Reducing Social Security Deeming Rates
On top of the deeming rate changes made at the time of the first package, the Government is reducing the deeming rates by a further 0.25 percentage points to reflect the latest rate reductions by the RBA.
As of 1 May 2020, the lower deeming rate will be 0.25 per cent and the upper deeming rate will be 2.25 per cent. The change will benefit around 900,000 income support recipients, including Age Pensioners.
For more information visit Support for Individual and Households