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Government Economic response to COVID-19

Government Economic response to COVID-19
 
The Morrison 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.

A total of $189 billion is being injected into the economy by all arms of Government in order to keep Australians in work and businesses in business.

This includes $17.6 billion for the Government’s first economic stimulus package, $90 billion from the RBA and $15 billion from the Government to deliver easier access to finance, and $66.1 billion in today’s economic support package.

 Our economic support package includes:
•    Support for households including casuals, sole-traders, retirees and those on income support 
•    Assistance for businesses to keep people in a job 
•    Regulatory protection and financial support for businesses to stay in business 
Support for workers and households

Coronavirus supplement

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.

This measure is estimated to cost $14.1 billion over the forward estimates period.

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 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.

This measure is estimated to cost $4 billion over the forward estimates period.
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.
•    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 
Assistance to business to keep people in a job
Boosting Cash Flow for Employers

The Government is 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.  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 per cent of their salary and wages withheld (up from 50 per cent), 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.

By linking the payments to business to staff wage tax withholdings, businesses will be incentivised to hold on to more of their workers.

The payments are tax free, there will be no new forms and payments will flow automatically through the ATO.

This measure will 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 are 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.

This measure is estimated to cost $31.9 billion over the forward estimates period, including the value of the measure announced in the first package.

Authorised by Sussan Ley MP, Liberal Party of Australia, 517 Kiewa Street, Albury NSW 2640

For information on how to access this assistance pleaes see the links below 

Treasury economic response overview

https://treasury.gov.au/coronavirus

Government support for workers and business


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