The Federal Government yesterday, 22nd March 2020, announced a second stage economic stimulus package. The “safety net” measures build on the first economic stimulus package they announced on the 12th March 2020.
Please note, the announcements are proposals at this stage, and Parliament is convening today to make the proposals law.
The legislation will provide more details about the measures.
Outlined below is a summary of some of the key measures announced:
SMALL & MEDIUM SIZED BUSINESS
The Government is providing up to $100,000 to eligible small and medium sized businesses, and not-for-profit organisations (including charities) that employ people, with a minimum payment of $20,000.
On 12 March 2020, the Government announced they would provide up to $25,000 to business, with a minimum payment of $2,000 for eligible businesses. Small and medium sized business entities with aggregated annual turnover under $50 million and that employ workers are eligible.
The Government yesterday enhanced this measure as part of the second economic response package. Not-for-profit entities (NFPs), including charities, with aggregated annual turnover under $50 million and that employ workers will now also be eligible. Now, 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.
An additional payment is also being introduced in the July – October 2020 period. Eligible entities will receive an additional payment equal to the amount they have received from the above. This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments.
Quarterly lodgers will be eligible to receive the credit from 28 April 2020 upon the lodgement of their March quarter BAS. The second payment will be after the lodgement of their June quarter BAS.
Australian banks will provide support to eligible businesses by deferring loan payments for up to six months.
Further, the banks in early April will look at providing loans to businesses. There will be no requirement to make loan repayments for the first six months. The Commonwealth is offering to guarantee these unsecured loans of up to $250,000 for up to three years.
Two cash payments of $750 each will be paid to eligible social security income support recipients and concession card holders. The first tax free payment, announced in the first stimulus package, is expected to be made from 31 March 2020. The second payment will be available to those who are not eligible for the Coronavirus supplement (see below) and will be paid from 13 July 2020.
The Government will temporarily double the Jobseeker Payment, previously called Newstart, providing people with an additional $550 a fortnight . This Coronavirus supplement payment will be available to sole traders and casual workers, provided they meet income tests. Sole traders and casual workers who are currently making less than$1,075 a fortnight will be eligible to receive the full supplement. The Government will waive asset tests and waiting periods to access the Jobseeker Payment.
The Government will allow eligible people to access up to $10,000 from their superannuation this financial year and in 2020-21.
To be eligible, you must meet one of the following conditions:
you’re eligible to receive Jobseeker Payment, Youth Allowance, Parenting Payment, Special Benefit of Farm Household Allowance.
on or after 1 January 2020, you were made redundant, your hours of work reduced by at least 20%, or if you’re a sole trader, your business was suspended or your turnover reduced by at least 20%.
People will not pay tax on the money they access, and withdrawals will not affect Centrelink or veterans' payments.
There will also be a temporary 50-per-cent reduction in superannuation minimum drawdown requirements for account-based pensions in 2019-20 and 2020-21.