Government unveils $66 billion economic support package: What’s in it for you?

The package includes financial relief for businesses, sole-traders and individuals out of work.

The Australian Government this week released the second stage of its economic plan to provide relief for those impacted by the COVID-19 pandemic.

The package, worth $66 billion, follows an initial $17.6 billion package and more than $100 billion in banking measures, and brings the total economic support to $189 billion.

It comes as stricter social distancing measures have been put in place, including the closure of pubs, registered and licenced clubs (excluding bottle shops), hotels (excluding accommodation), gyms, entertainment venues and nightclubs.

There is a ban on non-essential gatherings of more than 500 people outside or more than 100 people inside. All non-essential indoor gatherings of less than 100 people must have no more than one person per 4 square metres.

The new assistance package includes support for casual workers and sole-traders as well as regulatory protection and financial support for businesses.

“We know Australia’s more than 3 million small and medium businesses are the engine room of our economy. When they hurt, we all hurt,” said Prime Minister Scott Morrison.

“The next few months are going to be a difficult journey but we all have a role to play to adapt to the changes we’re facing, to cushion the impact of what is happening and to pull together so we can bounce back when we get to the other side.”

Support for individuals

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 over the next six months.

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.

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.

Support for businesses

Boosting Cash Flow for Employers

The Government is enhancing the Boosting Cash Flow for Employers measure and providing up to $100,000 to eligible small- and medium-sized businesses, and not-for-profits (NFPs) that employ people, with a minimum payment of $20,000.

These payments will help businesses and NFPs with their cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff. Small- and medium-sized business entities with aggregated annual turnover under $50 million and that employ workers are eligible.

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 to initiate bankrupt proceedings against an individual as well as temporarily increasing the time companies and individuals have to respond to statutory demands they receive.

The package also includes temporary relief for directors from any personal liability for trading while insolvent, and providing temporary flexibility in the Corporations Act 2001 to provide targeted relief from provisions of the Act to deal with unforeseen events that arise as a result of the coronavirus health crisis.

Increasing the instant asset write-off

The government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.

Supporting apprentices and trainees

The government is supporting small business to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for 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. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

Support for coronavirus-affected regions and communities

The government will set aside $1 billion to support regions most significantly affected by the coronavirus outbreak. These funds will be available to assist during the outbreak and the recovery. In addition, the government is assisting the airline industry by providing relief from a number of taxes and government charges estimated to total up to$715 million.

Supporting the flow of credit

Support for immediate cash flow needs for SMEs

Under the Coronavirus SME Guarantee Scheme, the Government will provide a guarantee of 50 per cent to SME lenders to support new short-term unsecured loans to SMEs. The Scheme will guarantee up to $40 billion of new lending. This will provide businesses with funding to meet cash flow needs, by further enhancing lenders’ willingness and ability to provide credit.

Quick and efficient access to credit for small business

The government is cutting red tape by providing a temporary exemption from responsible lending obligations for lenders providing credit to existing small business customers. This reform will help small businesses get access to credit quickly and efficiently.

Details on how to access financial support is available here.

For a more comprehensive breakdown of the support package, click here.

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