Government announces $17.6bn plan to battle coronavirus
The government has announced $17.6 billion economic plan to keep Australians in jobs, keep businesses in business and support households and the Australian economy as the world battles to contain the coronavirus spread.
The targeted stimulus package is focused on keeping Australians in jobs and helping small and medium-sized businesses to stay in business, the Prime Minister said at a press conference on Wednesday.
“Just as we have acted decisively to protect the health of the Australian people, based on the best evidence and medical advice, our support package responds to the economic challenges presented by this pandemic in a timely, proportionate and targeted way,” Prime Minister Scott Morrison said.
Stressing that the measures are all temporary, the PM and Treasurer explained that Australia is not immune to the global coronavirus challenge, but has taken steps to prepare for "this looming international economic crisis".
"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 Morrison said.
Delivering support for business investment
In an effort to ensure businesses continue to invest, the government has announced the following:
- $700 million to increase the instant asset write-off threshold from $30,000 to $150,000 and expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
- $3.2 billion to back business investment by providing a time limited 15-month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase.
Cash flow assistance for businesses
- $6.7 billion to boost cash flow for employers by up to $25,000 with a minimum payment of $2,000 for eligible small and medium-sized businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020.
- The payment will be tax free. This measure will benefit around 690,000 businesses employing around 7.8 million people. Businesses will receive payments of 50 per cent of their business activity statements or instalment activity statement from 28 April with refunds to then be paid within 14 days.
- $1.3 billion to support small businesses to support the jobs of around 120,000 apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.
Assistance for severely-affected regions
- $1 billion to support those sectors, regions and communities that have been disproportionately affected by the economic impacts of the coronavirus, including those heavily reliant on industries such as tourism, agriculture and education. It will also include additional assistance to help businesses identify alternative export markets or supply chains. Targeted measures will also be developed to further promote domestic tourism.