What $66b stimulus means for you
Prime Minister Scott Morrison has unveiled a massive new stimulus package in a bid to help everyday Aussies stay afloat throughout the coronavirus pandemic.
As the number of confirmed Australian cases nears 1100, the government has added a new raft of stimulus measures to the first $17.6 billion package announced 10 days ago, taking the country's total stimulus to $189 billion - or 9.7 per cent of GDP.
Here's what you need to know.
SUMMARY OF NEW PACKAGE:
• Coronavirus Supplement: $550 per fortnight payment for recipients of the JobSeeker Payment, Youth Allowance, Parenting Payment, Farm Household Allowance and Special Benefit for the next six months
• Early access to superannuation for struggling Australians
• Temporary reduction of minimum super drawdown rates
• Extra $750 for some households, including those on social security and veteran income support and eligible concession card holders
• Reduction of deeming rates by a further 0.25 percentage points
• Small and medium businesses with turnover under $50 million, along with not-for-profit charities, will be eligible for a tax-free cash payment of up to $100,000
• Support for airlines
• Temporary relief for financially distressed businesses
• Coronavirus SME Guarantee Scheme: Government to guarantee half a bank's loan to a small or medium enterprise impacted by the virus
Under its coronavirus plan, 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.
That payment will go to existing and new recipients of the JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit for the next six months.
Eligible income support recipients will receive the full amount of the $550 Coronavirus supplement on top of their payment each fortnight.
Services Australia will also expand its staff to 5000 to help the delivery of the new measures.
And social security and veteran income support recipients and eligible concession card holders will also receive an extra $750 payment - on top of the $750 payment announced on March 12.
This new payment will be made automatically from July 13, and around 5 million Aussies will benefit, including pensioners.
The original payment will also occur automatically from March 31.
The government is also reducing social security deeming rates by a further 0.25 per cent on top of deeming rate changes made during the first package.
From May 1, the lower deeming rate will be 0.25 per cent and the upper deeming rate will be 2.25 per cent.
The change will benefit around 900,000 income support recipients, including age pensioners.
Individuals struggling as a result of the COVID-19 outbreak will also be able to access some of their super early.
Eligible Aussies will be able to access up to $10,000 in 2019-20, and a further $10,000 in 2020-21.
To take advantage of the offer, you will need to apply online through myGov before July 1.
You won't need to pay tax on released super, and the money withdrawn will not affect Centrelink or Veterans' Affairs payments.
The government is also temporarily reducing superannuation minimum drawdown requirements for account based pensions and similar products by 50 per cent for 2019-20 and 2020-21.
It is designed to benefit retirees by providing them with more flexibility regarding how they manage their superannuation assets.
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.
The purpose of this payment is to boost cashflow and allow organisations to keep the lights on - and keep employees on the books.
Under the scheme, which builds upon the first stimulus 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 $2000 to $10,000. The payment will be available from April 28.
By linking the payments to business to staff wage tax withholdings, the government is hoping businesses will be encouraged to hold on to more of their workers.
The payments are tax free, there will be no new forms to fill out, and payments will flow automatically through the ATO to small to medium businesses with an annual turnover of less than $50 million that employ staff.
And from July 28, eligible businesses will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments received.
Another measure is the Coronavirus SME Guarantee Scheme, which will see the government guarantee 50 per cent of new loans issued by eligible lenders to SMEs.
And the government is also 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.
HELP FOR AIRLINES
The government is also providing up to $715 million in support for Australian airlines and airports, which will ensure our aviation sector receives timely cash flow support through an unprecedented period of disruption to international and domestic air travel.
REACTION TO THE PACKAGE
PwC chief economist Jeremy Thorpe said the scale of the package proved the "profound and immediate impact" of the coronavirus on the economy.
"The government talks about a 'bridge to recovery'; but we are more likely facing a complete reboot of the economy," he said.
"The unprecedented scale of the cumulative stimulus package, now up to 9.7 per cent of GDP, reflects the government's concern about the impending scale of an economic shutdown. If one was needed, this should be a further wake up call for those who remain unconcerned about the economy's prospects."
Mr Thorpe said the package also indicated the government could begin locking down more industries and regions to seek to address the pandemic and "flatten the curve".
"It is noteworthy that the government also flagged that further measures will be required," he said.
Meanwhile, the package has been welcomed by NAB CEO Ross McEwan, who said the Coronavirus SME Guarantee Scheme in particular would be "critical in helping banks such as NAB support businesses who need a quick cash flow injection to stay open and keep people in jobs."
And it has also been "strongly endorsed" by the Tax Institute, with senior tax counsel Professor Bob Deutsch claiming it provided extra support for small businesses, casual workers and retirees.
"Of particular note, is the initiative to provide $100,000 through the tax system to employers to assist them to fund employee wages during the next few months," he said.
"Understanding the detail of how this works and exactly who will be eligible will be revealed in the fine print of the legislation which the institute will be studying closely and commenting upon as soon as it is released.
"The institute, while reluctant to see superannuation savings eroded, nonetheless welcomes the ability for eligible individuals in financial stress to access super early - up to $10,000 in the current financial year and in the next financial year. Superannuation was always intended to be for retirement purposes, but the current emergency is of such a nature as to warrant this temporary adjustment."
Originally published as What $66b stimulus means for you