The Federal Government has released the second stage of its economic plan to cushion the economic impact of the coronavirus and help build a bridge to recovery.
Federal Nationals Member for Lyne, Dr David Gillespie, said a total of $189 billion was being injected into the economy by all arms of Government in order to keep Australians in work and businesses in business.
The economic support package includes:
• Support for households including casuals, sole-traders, retirees and income support
• Assistance for businesses to keep people in a job
• Regulatory protection and financial support for businesses to stay in business
“We want to help businesses keep going as best they can and for as long as they can, or to pause instead of winding up their business,” Dr Gillespie said.
“We need to ensure that when this crisis has passed Australian businesses can bounce back.
“Our measures are geared towards keeping people in work, providing a safety net for those that aren’t in work and keeping businesses alive so they can get to the other side.
“Small and medium businesses are the engine room of our economy. When they hurt, we all hurt.
“We all have a role in keeping these small family businesses open, they are the ones who sponsor our local netball and football teams, donate to our raffles. They are part of the fabric of our towns and villages.
“The Government is taking unprecedented action to strengthen the safety net available to Australians that are stood down or lose their jobs and increasing support for small businesses that do it tough over the next six months.
“These extraordinary times demand extraordinary measures.
“An increase of up to 5,000 staff for Services Australia will assist to support delivery of new Government measures.”
The package includes;
• $17.6 billion for the Government’s first economic stimulus package
• $90 billion from the RBA
• $15 billion from the Government to deliver easier access to finance, and
• $66.1 billion in today’s economic support package.
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 for the next 6 months.
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.
An increase of up to 5,000 staff for Services Australia will assist to support 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 second payment, 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.
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 May 1, 2020, the lower deeming rate will be 0.25 per cent and the upper deeming rate will be 2.25 per cent.
Full information on assistance can be found at servicesaustralia.gov.au.
SUPPORT FOR BUSINESS
Boosting Cash Flow for Employers
The Government is providing up to $100,000 to eligible small and medium sized businesses, and not for-profits, 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.
Business 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.
The Government’s support will enhance lenders’ willingness and ability to provide credit to SMEs with the Scheme able to support $40 billion of lending to SMEs.
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 must 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.
This builds on the support for business and business investment provided in our first economic support package, which included:
• increasing the instant asset write off
• backing business investment by providing accelerated depreciation deductions
• supporting apprentices and trainees
• targeted support for Coronavirus-affected regions and communities
Support for the aviation industry
As previously announced, the Government is also providing up to $715 million in support for Australian airlines and airports, which will ensure that our aviation sector receives timely cash flow support through an unprecedented period of disruption to international and domestic air travel.
While these are challenging times, Australians can rest assured that the Commonwealth Government will do all that is necessary to support them and build a bridge to ensure that all Australians can get to the other side of this crisis.
Full information on assistance for business can be found by visiting treasury.gov.au.