SYDNEY, Australia – Following the initial cash package as part of the Commonwealth Government’s economic plans to support Australians amid the virus crisis, it released the second part of the economic support package.
The government released the second stage of its relief plan today to help mitigate the economic impacts of the spreading coronavirus and boost the country’s recovery. The initial stimulus package from the government was around $17.6 million. There is also a cash injection from the Reserve Bank Australia (RBA) worth $90 billion and another from the government worth $15 billion to quick access to financing services.
Right now, there is a total of $189 billion worth of economic stimulus package to help Australian households and businesses, which includes the additional $66.1 billion announced today.
The economic support package will include cash support for Australian households, including sole-traders, casuals, those who are on income support, and retired individuals. There is also cash aid for businesses to help keep workers in their jobs. The support will also include financial assistance and regulatory protection to help companies to continue with their operations.
According to Prime Minister Scott Morrison, the Australian government is acting to mitigate the blow from the Covid-19 pandemic towards households and businesses. He said that the recent initiative from the government and financial sectors aims to get through every Australian on the other side of the ongoing crisis.
The Prime Minister said that the government aims to help the business keep their operations going as much as possible or pause their activities instead of closing. He said that they are working their best to give Australian companies a chance to bounce back once the health crisis is over.
According to the Australian Prime Minister, their focus right now is to provide cushion to lessen the blow of the ongoing crisis. He hopes that every Australian can get through these trying times together.
He also stated that whatever is happening in the country right now is only temporary, which is why the first action from the government focuses on building a bridge for a comeback. The Prime Minister said that they concentrate on keeping more people employed and improving the safety net for business owners.
According to him, there are around three million small and medium-sized businesses in Australia. These firms are the engine room of the country’s economy, he said, and if these businesses hurt, the country will be primarily affected.
The Prime Minister added that the next couple of months would be hard for everyone in Australia, but each individual has a part to play to adapt to the changes.
Meanwhile, Treasurer Josh Frydenberg stated that the overall economic support from the government worth $189 billion is equal to 9.7% of the country’s gross domestic product (GDP).
The official said that the Australian government is taking significant measures to help strengthen the support available to all citizens and businesses. He stated that the financial help could provide relief to those who lost their jobs during the crisis and back up small businesses to get through at least for the next six months.
The eligibility for the coronavirus supplement from the government to support households and workers will expand and paid at $550 per day. It will be available to both new and existing JobSeeker Payment recipients as well as beneficiaries of Parenting Payment, Special Benefit, Farm Household Allowance, and Youth Allowance jobseeker.
The estimated total worth for this cash support in around $14.1 billion over the expected period. Services Australia will expand its workforce and add 5,000 workers to help support the delivery of new cash support from the government.
Meanwhile, the payment support for Australian households will include an additional $750 from the previous $750 worth of assistance for beneficiaries of veteran income support and social security support. It will also include qualified concession card holders, excluding those who are eligible for the coronavirus support.
The schedule for the first cash assistance from the government is on March 31. Around five million of income support, concession card holders, veteran, and social security recipients will automatically get the second payment on July 13.
Along with the initiative to cushion the impact of the crisis, is the early release of superannuation. It will provide individuals greatly affected by the virus the access their pension worth $10,000 for the 2019-2020 period and another $10,000 for the 2020-2021 period.
Eligible Australians can now apply for their superannuation online to gain early access to $10,000 worth of support before July 1. For the next three months after July 1, they can also access the other $10,000. The money they can get from the superannuation will not affect the payments for Veteran’s Affairs and Centrelink, nor are they required to pay tax on the sum released.
Also, the government is decreasing the current deeming rates for social security by another 0.25% in line with the recent cut from the RBA. The new deeming price will take effect on May 1, which will benefit about 900,000 Australian Age Pensioners and income support recipients. This stimulus package is worth around $876 million over the estimated period.
The government will also further support to businesses to keep workers in their jobs. The assistance includes cashflow influx for employers and raising the instant asset write off, among others. Eligible small and mid-sized businesses will also receive between $20,000 to $100,000 cash support. Charities and other not-for-profits will receive the same package as well.
These cash packages from the government aim to help firms continue with their businesses by eliminating worries about funds to pay rent, electricity, and salary for their workers. The payments towards companies are tax-free as well.
The Australian government is also going to unleash a guarantee scheme for SMEs. It will provide them access to quick working capital to help mitigate the impact of the virus. Under the initiative, SMEs will get a 50% guarantee for new loans from eligible banks and lenders.
The aviation industry will get support during the crisis as well, with $715 million from the government. The stimulus package will help in boosting cash flow for the aviation sector, especially with the disruption in both domestic and international air travel.
During this crisis, the economic support package from the Australian government can provide much-needed relief to individuals and businesses alike.