PM announces $750 cash handouts
Prime Minister Scott Morrison has unveiled details of his government's billion-dollar stimulus package including $750 one-off payments for those on government benefits including pensioners and those on family tax benefits.
Mr Morrison said the gross impact of the stimulus package is $22.9 billion, making up 1.2 per cent of GDP.
"Households will receive a stimulus payment of $750 across the full gambit of those who receive all sorts of benefit payments," he told reporters today.
"The biggest beneficiaries of that will be pensioners. They comprise around half of those who will receive those payments, but they also will be extended to those in family tax benefits, which obviously goes to those in earning households."
The Prime Minister said other measures included supercharging the instant asset write-off, backing business investment with an accelerated depreciation scheme and a cashflow boost for small and medium-sized employers.
About 690,000 businesses across Australia will be able to get grants for up to $25,000.
The government will also support employers to keep 117,000 apprentices in jobs over nine months.
The PM will also address Australians tonight at 7pm after delivering his coronavirus stimulus package this morning.
Some details of the package were revealed early and included that small businesses would get tax breaks and subsidies.
About $6.7 billion over four years will be spend on helping small businesses keep running amid the outbreak, in addition to expected cash payments to certain households and a $2.4 billion health package unveiled on Wednesday that includes the creation of 100 fever clinics.
Here are some of the measures:
KEEPING APPRENTICES IN JOBS
Under the plan, the government will offer small businesses with fewer than 20 employees, up to $7000 each quarter for every apprentice in wage assistance, to retain existing apprentices and trainees.
The subsidies are expected to reach around 117,000 apprentices and are worth about $1.3 billion.
The cash injection will subsidise apprentice wages for up to nine months with the aim of keeping them in a job in challenging economic circumstances, which the government admits will put pressure on small businesses.
HANDOUTS AND TAX BREAKS FOR BUSINESSES
Businesses with a turnover of under $50 million will have access to a tax-free payment of up to $25,000 to help boost cash flow.
It's estimated the measure will cost $6.7 billion over four years, benefiting almost 700,000 businesses and 7.8 million workers.
The government will also spend $700 million over four years to expand the instant asset write-off.
Businesses that pay salary and wages will receive a minimum $2000, even those not required to withhold tax.
The instant asset write-off threshold will also be raised from $30,000 to $150,000 and access expanded to businesses with an annual turnover of $500 million.
This measure is expected to drive interest in the purchases of cars, utes and trucks, harvesters and tradies' equipment.
BOOST FOR PENSIONERS, UNEMPLOYED
Scott Morrison has confirmed that deeming rates - used to calculate how much some pensioners are earning on their financial investments - will be cut by 50 basis points.
In addition, Australians on Newstart or pension payments are expected to get $500 cash payments, Sky News reports.
"The size of it illustrates just how much the government fears a recession because of this coronavirus," Sky News political editor Andrew Clennell said yesterday.
While the $500 payments would be less than the Rudd Government's $900 handouts, Clennell said they would still cost the government billions.
Australian Council of Social Services chief executive officer Cassandra Goldie said reports of $500 one-off cash payments to pensioners and unemployed would not be enough and people on Newstart needed a permanent rise.
"It won't be enough, particularly for people on the very lowest incomes," she told Today this morning.
"We're really hoping that the government does the right thing here, and provides really welcome relief for people on the very lowest incomes.
"We want to see the ongoing increase, particularly for Newstart, all the economists have been asking for that to be included in this stimulus package. We know that people on the lowest incomes will spend it and that's what we need for the economy as well."
RELATED: Who will get $500 cash payments?
SURPLUS IS DEAD
Finance Minister Mathias Cormann has confirmed to ABC's RN Breakfast that the government's promised surplus won't happen.
"People can do the maths," he said. "This is obviously not going to be a surplus year, 2019-20."
Treasury expects the virus will detract 0.5 percentage points from Australia's growth figures in the March quarter and experts say Australia could be heading for a recession.
Treasurer Josh Frydenberg said the package would put Australia in "the strongest possible position" to deal with the virus fallout.
"The government has worked hard over the last six and a half years to return the budget to balance so we have the flexibility to respond to the serious economic challenges posed by the coronavirus," he said.
PM CALLS FOR BIG BUSINESS SUPPORT
Meanwhile, Mr Morrison has urged big business to support workers during the coronavirus crisis or risk brand damage.
"I'd be encouraging employers to take a flexible and forward-leaning approach in supporting their employees during this process," he told reporters in Canberra on Wednesday.
Mr Frydenberg met with bank CEOs to discuss the impact of the virus on the economy.
"Australia's banking system is strong and well capitalised to support households and businesses during this challenging time," he said.
Banks will offer a range of assistance, from waiving fees and charges to interest-free periods, debt consolidation and a deferral of scheduled loan repayments.
Opposition Leader Anthony Albanese said Labor would support any necessary funding for the virus response.
"The cost of inaction will be far greater than the cost of action," he said. Mr Albanese said workforce issues would have to be solved, particularly for health sector staff.
The Australian Council of Trade Unions has demanded the government legislate two weeks of paid leave for all workers to deal with the virus.