What does the government’s latest coronavirus stimulus package mean for you?
Monday 23 March 2020
The coronavirus outbreak has evolved from shadowy threat to full-blown disaster, and governments and central banks around the world are scrambling to contain the fallout.
Yesterday, Prime Minister Scott Morrison announced a $66 billion stimulus package to protect those Australians “who will be feeling the first blows of the economic impact of the coronavirus.”
This latest round of stimulus brings the total amount the government has injected into the economy over the last month to $189 billion - close to 10% of Australian GDP - with more expected to arrive soon. Here are a few of the benefits.
Supplement for welfare recipients
Individuals who apply for or are already receiving income support like the Jobseeker Payment will be able to access a coronavirus supplement of $550 per fortnight over the next 6 months.
This will complement any existing payments, and will hopefully ease some of the financial strain lower-income Australians might be facing as a result of the coronavirus outbreak.
Two separate payments of $750 will also be made to social security, veteran and other income support recipients and eligible concession card holders to help support households and prop up domestic demand.
Early release of superannuation
From April, those affected by the current crisis will be able to gain early access to their superannuation. Withdrawals will be capped at $10,000 for this financial year, with a further $10,000 available for withdrawal in 2020-21.
Individuals will not be required to pay tax on these withdrawals, and they will not affect Centrelink or Veterans’ Affairs payments.
According to Treasurer Josh Frydenberg, this will put up to $27 billion worth of superannuation back in Australians’ hands, while only subtracting less than 1% from the $3 trillion currently in the superannuation system.
Retirees will also be happy to hear the government will be reducing minimum drawdown requirements from 4% to 2%, giving older Australians with account-based pensions or similar products “more discretion over the management of their assets.”
Direct support for businesses
The government will also introduce a number of measures to help keep Australian businesses humming, including cash payments of between $20,000 and $100,000 to small and medium-sized enterprises.
Up to 30,000 not-for-profit organisations will also be eligible for these payments, so long as they have an annual turnover of less than $50 million.
“This will be a lifeline for hundreds of employers like the local hairdresser, the local cafe, the local mechanic, whose income has been significantly reduced over this difficult period,” said Mr Frydenberg.
“This is the single largest measure in the second package, and together with the first initiative in the first package for small businesses is worth $31.9 billion in total.”
The government has also pledged to guarantee 50% on unsecured loans of up to $250,000 for 3 years to ensure the continued flow of credit to Australian SMEs. This will commence in April 2020, and will apply to businesses with a turnover with less than $50 million per year.
For more information on the kind of assistance currently available to households, read about what your state is doing to help during the coronavirus outbreak.