The Morrison government is adding A$66 billion ($38.50 billion) to its economic stimulus and has flagged a third round will be needed as the coronavirus impact continues to bite.
Dole payments will double and casual workers and sole traders will be able to access welfare if their income drops because of the coronavirus, under an extra A$66 billion being thrown at the economy.
The Morrison government has announced its second set of stimulus measures, just 10 days after it first moved to diminish the economic blow of the virus and the measures to combat it.
And it is already flagging a third round.
“We will be supercharging our safety net, we’ll be supporting the most vulnerable to the impacts of the crisis, those who will feel those first blows,” Prime Minister Scott Morrison told reporters on Sunday.
“(We will) preserve the businesses that comprise our economy so on the other side they can bounce back strongly and don’t have to reassemble themselves from the ruins of failed businesses.”
Sunday’s package includes a significant expansion of the wage-based cash payments to small businesses already announced—measures Labor has flagged as supporting when parliament sits on Monday.
Small and medium businesses and not-for-profits that employ people will now receive a full rebate on income tax withholdings, up to A$100,000.
They’ll all get a minimum of A$20,000—10 times the amount announced previously.
This is expected to help some 690,000 businesses employing about 7.8 million people, along with 30,000 not-for-profits who weren’t previously set to receive the cash flow injection.
A coronavirus supplement of A$550 a fortnight will be added to the Jobseeker payment—known as Newstart until last Friday—and access to the dole will be relaxed and waiting period waived to allow casuals and sole traders whose income drops off.
People will also be allowed to access up to A$20,000 of their superannuation savings, in two payments, if they declare to the tax office their work hours or income has fallen by 20 per cent because of the virus.
The government will make a second A$750 payment to pensioners and welfare recipients in July, on top of the cash handout already flagged to hit bank accounts at the end of March.
It will also be a guarantor on unsecured small business loans and is easing regulations and red tape for companies and setting up a “regulatory shield” around liquidations and bankruptcies.
“Today’s announcement will provide hope and support for millions of Australians at a time when they need it most,” Treasurer Josh Frydenberg told told reporters.
Combined with measures already announced, including the Reserve bank’s injection of cash for banks to provide low-interest business loans, the total stimulus reaches A$189 billion, just shy of 10 per cent of GDP.
Labor is inclined to support the stimulus package, which is expected to be legislated on Monday.
But shadow treasurer Jim Chalmers said it was not just the size of the package that mattered but also the speed in getting it into people’s hands.
“People are already getting laid off and businesses are already closing,” he told reporters.
“The idea that not a cent of this assistance has flowed yet and that some of it won’t flow until the end of April or even July in some circumstances is clearly not good enough.”
However, Opposition Leader Anthony Albanese flagged concerns about giving people early access to superannuation, saying it was not the best time for individuals to be withdrawing money given the impact from the fall in the share market, which has seen tens of billions of dollars wiped off share prices in the past few weeks.
Frydenberg told reporters, “These withdrawals [$10,000 of their super in the 2019/20 financial year and a further 10,000 in 2020/21] will be tax-free and available to those who are eligible for the coronavirus supplement as well as sole traders who have seen their hours of work, or income fall, 20 per cent or more as a result of the coronavirus.”
He also said that in addition to granting early access to super, the government would allow retirees more flexibility on how they manage their superannuation assets.
Instead of requiring retirees to draw down a minimum of 4 percent per annum from that superannuation, the government said that it is temporarily halving this requirement to 2 percent for this year and next year.
By Katina Curtis, AAP Senior Political Writer. With additonal reporting by NTD staff.