During the first quarter of 2020, millions of Australians received the news about the series of financial assistance that the Federal Government would be handing out. These types of monetary aid were in response to the growing negative impact of the coronavirus pandemic to the employment of the people. As the Federal Government ramped up social distancing rules to prevent the dissemination of the deadly virus, businesses had no choice amid the global healthcare crisis. They needed to enforce several measures that affected their staff members adversely. Hence, plenty of these workers struggled as their employers reduced their working hours, while others got stood down from their jobs. The stimulus payments of the government serve as subsidies to alleviate the severe impacts of unemployment to the workers.
Government’s Series of Stimulus Packages amid the COVID-19 Pandemic
The Australian Government has released three massive stimulus packages in March 2020. Prime Minister Scott Morrison and his Cabinet announced this government monetary help amounting to over $200 billion combined. They consist of the following financial assistance:
1) On March 12, the Federal Government proclaimed cash payments to pensioners and welfare recipients like those on Newstart that amounted to a one-off $750. Then, beginning in July, these monetary assistance recipients will receive the second payment worth $750 as well. The Morrison Government mentioned this forthcoming batch of financial aid in the second stimulus package announcement.
2) The second stimulus plan, which the Government of Australia announced on March 22, consisted of an additional $550 worth of payments. Welfare recipients obtain this monetary aid, with the government paying them every two weeks, and on top of the regular payments they get.
3) On March 30, Prime Minister Scott Morrison pronounced the Australian Government’s JobKeeper plan worth $130 billion on his official Twitter page. He relayed that the government’s financial assistance is for companies that the coronavirus crisis profoundly affected financially. Furthermore, Morrison said that the monetary help makes sure that these firms can still pay their employees amid the pandemic. The JobKeeper allowance gives approximately six million workers with a wage subsidy worth $1,500 every two weeks via their employer. As a kind of financial support, it assists in keeping the people in jobs.
4) Besides the three stimulus payments, the Government of Australia has offered other forms of aid. One of them is the ability of the citizens to avail up to $20,000 of their superannuation during the pandemic. The other mode of help is the implementation of a moratorium on rental evictions. This type of support assists renters, which the COVID-19 crisis severely affected financially, from getting removed from their apartment units.
Employees who did not get substantially impacted by the coronavirus pandemic can budget the stimulus payments that the Morrison Government has confirmed to hand out. They can organise their finances and utilise the funding to boost their savings in the bank.
3 Ways to Increase Savings Using Government’s Financial Subsidies
The Australian Government has announced several forms of financial assistance for the people in light of the coronavirus crisis. In the most recent declaration about the JobKeeper plan, qualified workers for the salary subsidy consist of sole traders, part-time employees, and full-time workers. Casual employees who have been with their employer for at least one year, not-for-profit groups, and New Zealand citizens on 444 visas are also eligible to receive the monetary aid that the Morrison Government gives out. Australian savers who did not get severely affected by the COVID-19 pandemic can make wise use of the government subsidy by saving it entirely in their bank accounts. Otherwise, they have the option to keep the leftover funds in their savings accounts once they have already paid the essential bills. Here are three tips on how the people can increase their savings by adding the financial aid they received from the Federal Government to their stashed funds:
1. Consider opening a term deposit account.
Financial service providers have offered special term deposit rates as the coronavirus crisis carry on affecting the nation’s workers adversely. These lenders offering interest rates worth 1.7 per cent and above on 12-month term deposit accounts comprise Westpac Banking Corporation, Auswide Bank, and the Commonwealth Bank of Australia, among many others. Employees who can save the wage subsidy they get from the Federal Government can benefit from opening a term deposit. It is a relatively risk-free location to keep their funds. Term deposit account holders, however, should remember that they typically cannot withdraw their money anytime they wish to without incurring a penalty.
2. Avail of savings accounts with a high interest rate.
Having a savings account in one’s preferred bank is ideal for storing hard-earned funds safely. However, money stashed in usual savings accounts is theoretically going backwards in value as of May 2020 because of the yearly inflation rate of the country presently at 1.8 per cent. Also, the five money rate slashes of the Reserve Bank of Australia since the middle of 2019 have led interest rates on savings accounts to drop considerably. Most savings accounts barely offer over 1 per cent interest per annum. Nevertheless, it is still likely to find a savings account that has a better offer, with interest rates above 1.8 per cent. They include bonus and introductory savings accounts. The latter offers a higher interest rate for three to six months, giving some boost to the amount of money saved.
3. Open a savings account with money-saving tools and features.
Customers who feel the financial anxiety that the COVID-19 crisis has caused can alleviate their monetary woes by getting a savings account with helpful and innovative features. These money-saving tools can be in the form of state-of-the-art banking applications. Moreover, they may consist of spending insights, bills payment reminders, and alerts when the consumer spends too much on a particular kind of purchase. New neobanks like Xinja, Up, and 86400, as well as huge lenders like the Commonwealth Bank of Australia, are among the platforms that come with a bundle of convenient financial technology tools. These features can be useful during the economic downturn.
It is inevitable for consumers to feel worried because of the economic uncertainty that the coronavirus pandemic has caused. It is, indeed, concerning to think about how to meet one’s financial obligations, especially with the problems that retrenchment processes and job loss entail. Nevertheless, plenty of help is available. People can utilise technology in getting themselves well educated about how to manage their finances and save more money despite the immediate international health threat. Furthermore, they can consult financial experts and their banks on how they can maximise their savings. Finally, people can turn the crisis into a learning opportunity. During these unprecedented and unpredictable times, they can develop financial discipline and resilience. Consumers can achieve these ideal financial attitudes by understanding how to budget the government’s financial assistance and re-evaluating their spending habits. The coronavirus crisis, if they view it as an opportunity, can undoubtedly aid them in learning how to be financially savvy in both times of bleakness and abundance.