Monday update

In short – the announcements so far taken from transcripts are:

Delivering support for business investment

· $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. For example, assets that may be able to be immediately written off are a concrete tank for a builder, a tractor for a farming business, and a truck for a delivery business.

· $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.

These measures have started already

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 9 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.

Stimulus payments to households to support growth

· $4.8 billion to provide a one-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession card holders. Around half of those that will benefit are pensioners. The payment will be tax free and will not count as income for Social Security, Farm Household Allowance and Veteran payments. There will be one payment per eligible recipient. If a person qualifies for the one off payment in multiple ways, they will only receive one payment.

Payments will be from 31 March 2020 on a progressive basis, with over 90 per cent of payments expected to be made by mid-April.

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. This will include the waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks. 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. Further plans and measures to support recovery will be designed and delivered in partnership with the affected industries and communities.

The Government is also offering administrative relief for certain tax obligations, including deferring tax payments up to four months. This is similar to relief provided following the bushfires for taxpayers affected by the coronavirus, on a case-by-case basis. The ATO will set up a temporary shop front in Cairns within the next few weeks with dedicated staff specialising in assisting small business. In addition, the ATO will consider ways to enhance its presence in other significantly affected regions to make it easier for people to apply for relief, including considering further temporary shop fronts and face-to-face options.

On Sunday

Today, the government is announcing the doubling of the Jobseeker Allowance, formerly known as Newstart, through the introduction of a temporary coronavirus supplement.

The government will also waive the assets test and waiting periods for the Jobseeker Allowance, allowing more Australians to more quickly access the support that they need. The coronavirus supplement will provide an additional $550 a fortnight on top of the existing jobseeker or Newstart payment and will be available to sole traders and casual workers who meet the income test. This means anyone eligible for the maximum jobseeker payment will now receive more than $1,100 a fortnight, effectively doubling the jobseeker allowance.

In the first package on the 12th of March, we announced a $750 payment for Australians on income support. Today, we announce that from July 13, a further $750 payment to those on income support that are not eligible for the coronavirus supplement. This includes those receiving the age pension, the carer's allowance, family tax benefits and the Commonwealth Seniors Health Card. In total, 5.2 million Australians. We are also reducing the deeming rates by a further quarter of a per cent to reflect the recent Reserve Bank interest rate cut. Over 900,000 thousand social security recipients on income tested support will now benefit. Our economic response will allow those Australians who are in financial stress as a result of the Corona virus to access more of their own money in superannuation. From April, those affected will gain access to their superannuation capped at $10,000 this financial year, and a further $10,000 next financial year. These withdrawals will be tax free. I repeat, these withdrawals will be tax free and available to those who are eligible for the coronavirus supplement, as well as sole traders who have seen their hours worked or income fall by 20 per cent or more as a result of the coronavirus. Applications will be made online through a simple declaration to the tax office.

Currently, retirees are required to draw down a minimum of 4 percent a year from their superannuation, a number that increases with their age. The government is halving this requirement to 2 per cent for this year and for next year, to give retirees more discretion over the management of their assets.

All employing businesses will receive at least $20,000. All employing small businesses will receive at least $20,000 and some of the larger SME’s will receive up to one hundred thousand dollars. And we are extending this measure to around 30,000 not for profit organisations, which have an annual turnover of less than $50 million dollars. This payment will be automatically paid through the tax system largely over the next six months with the first payment after 28 of April. No new forms will be required from Australian small and medium sized businesses.

Over the course of the last week, $105 billion dollars is being injected into the financial system by the government and the Reserve Bank of Australia, the purpose of which was to lower the cost and increase the availability of credit, particularly to smaller, medium sized businesses. Today, the government is going one step further and is guaranteeing in a 50/50 partnership with the banks and other lenders, more lending to Australia's small and medium sized businesses. This $40 billion scheme, which will start in early April, will provide loans of up to $250,000 for up to 3 years for a business with a turnover of less than $50 million dollars. No repayments will be required for the first six months. These will be unsecured loans and they will help build a bridge for small and medium sized businesses to the other side of the coronavirus, and I urge small businesses to go and talk to their bank about these new opportunities that are available.

More flexibility in insolvency and bankruptcy laws to keep these businesses alive and to trade through this period. The government is proposing to increase the threshold at which a creditor can take action to initiate insolvency or bankruptcy from as low as $2,000 today to $20,000 and giving companies and individuals 6 months instead of 21 days to respond. We will also provide relief from directors, from personal liability, where the company is trading while insolvent. This relief will be provided over the next 6 months and will be vital to helping companies get through this period. As a result of the health related restrictions being put in place to reduce the impact of the coronavirus, it will not be possible for many companies to comply with their obligations under the Corporations Act, for example, holding general meetings in person. A temporary 6 month power will be provided to me as the Treasurer to deal with these situations as they arise