Prime Minister Scott Morrison has announced handing out $750 in cash to millions of families receiving family tax benefits, aged pensioners, and the unemployed in a desperate bid to stop a coronavirus-induced recession. In a bid to arrest the spreading economic impact and potential consequences of COVID-19, the PM has also extended the “Sickness benefit” that Centrelink offers, renaming it to “job-seeker allowance” and made it available to casual workers – who end up in isolation and thus cannot go to work because of COVID-19. The benefit will become available immediately and there is no waiting period applicable in that scenario.
The multi billion-dollar economic stimulus package, following closely the heath package stimulus announced yesterday, is twice the size mooted by the Morrison government just days back.
The majority of the cash assistance to small businesses, seniors and families will be delivered within weeks.
All these measures are temporary and expected to be stimulatory, delivering results by keeping – businesses in business, employees in job and saving the economy from going into recession.
It will wipe out the forecast “back in black” $5 billion surplus, a decision the Prime Minister predicted Australians would understand.
“This is very front-end-loaded. We’ve done that on purpose,” Mr Morrison said.
“The cash payments have two purposes. And they’re both important.
“Of course, those who receive them – that is obviously a benefit to them. But more importantly, frankly, it is about a cash injection into the Australian economy, which supports small businesses and supports medium businesses.
“This plan is about keeping a business in business, particularly small and medium-sized businesses, and this plan is about ensuring the Australian economy bounces back stronger on the other side of this and, with that, the budget bounces back with it.”
The new measures also include a wage subsidy for apprentices and tax breaks for small businesses. All this is aimed at attempting to recession-proof the Australian economy.
Immediate business write-offs
Small businesses can now secure very generous instant asset write-offs, effective immediately until July 1. The government thinks it will encourage immediate investment and keep it going.
Small Business Grants of upto $25,000
Employers with a turnover of up to $50 million will be eligible for up to $25,000 in tax-free payments to help cash flow. This will add up to$ 6.7 billion over the forward estimates.
If you are a small business employing up to 20 employees that withholds tax on employees’ salary and wages, you may be eligible to receive a payment equal to 50 per cent of the amount withheld, up to a maximum of $25,000.
“We’ve balanced the budget and managed our economy, so we can now use this to protect the health, wellbeing and livelihoods of Australians,” Mr Morrison said.
“Our targeted stimulus package will focus on keeping Australians in jobs and keeping businesses in business so we can bounce back strongly.”
Help for apprentices to fight COVID-19
Prime Minister also announced wage subsidies of $7000 a quarter for each apprentice to retain existing trainees or to re-employ those who lose their jobs because of any coronavirus downturn.
Employers will secure a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage from January 1-September 30, 2020.
The apprentice or trainee must have already been in training with a small business on March 1.
Employers can register for the subsidy from April 2.
Treasurer Josh Frydenberg said in its design of the package to fight the threat of COVID-19 the government has been very careful not to repeat the mistakes of previous stimulus programs (Rudd government’s GFC stimulus package) and not undermine the structural integrity of the budget.
“By acting decisively, this package will put Australia in the strongest possible position to deal with the economic challenges we face and to make sure our economy bounces back even stronger”, Mr Frydenberg added.