REVEALED: $18 billion rescue package: Here’s what it means for you
Prime Minister Scott Morrison will inject a multi-billion dollar coronavirus stimulus package into the economy, with funding for small businesses, pensioners and the aged care sector among its largest elements.
However, the biggest element is the $750 payments the government will direct to households receiving benefits payments. Those payments will be targeted at around 6.5 million Australians, with 2.4 million pensioners making up the majority of that group.
Morrison and Treasurer Josh Frydenberg officially revealed the full stimulus package on Thursday. Morrison estimates the $17.6 billion package will have a benefit worth $22.9 billion over the coming two years.
Details of the package including $2.4 billion in health spending to tackle coronavirus, or Covid-19, and $6.7 billion for small and medium businesses, have already been revealed.
Morrison said the measures will be worth just under 1 per cent of Australia’s Gross Domestic Product (GDP).
It comes as experts warn the rapidly spreading respiratory illness could punch Australia’s 2020 GDP $158 billion as the virus takes out the tourism and hospitality, seafood, education and events industries and forces millions of Australians into quarantine.
The virus’ impact could even be larger than the GFC, the prime minister warned on Tuesday, as crippled Australian airlines and haemorrhaging stock markets send increasing shockwaves through the domestic and international economy.
Here’s what the coronavirus stimulus package means for you
If you receive benefits…
Morrison announced households “across the full gambit of those who receive all sorts of benefit payments” will receive stimulus payments of $750.
In a briefing this morning, he said the biggest beneficiaries will be pensioners.
“They comprise around half of those who will receive those payments, but [the package] also will be extended to those in family tax benefits, which obviously goes to those in earning households.”
Frydenberg said this element will cost $4.8 billion and will flow from 31 March.
The rumours the government would provide the controversial cash splash leaked on Wednesday afternoon and came after Morrison and Frydenberg both poured cold water on the idea.
The two have historically criticised the Rudd government for its similar $900 payment during the Global Financial Crisis, claiming it did too much damage to the Federal Budget. That particular plan saw Australians earning up to $80,000 score a $900 cash bonus into their bank accounts.
However, social services groups, economists and unions also lobbied the government to target households with the stimulus package.
If you’re a pensioner…
Morrison has confirmed deeming rates will be cut by 50 basis points.
The deeming rate is the rate of return the government assumes pensioners are earning on their assets and is used to determine the level at which the pension will be paid.
However, the Reserve Bank of Australia’s (RBA) recent decision to cut the official cash rate down to 0.5 per cent meant the interest retirees were earning on their savings accounts was less than the amount the government thought they were – the official deeming rate – and as such were receiving smaller pensions.
The deeming rate was also revised down in 2019 as the RBA began its rate-cutting campaign.
If you are a business…
Around $6.7 billion will be funnelled into automatic grants of up to $25,000 for businesses with up to $50 million in turnover.
Businesses that withhold tax on their staff’s salaries and wages will be eligible for payments of 50 per cent of the amount withheld, up to $25,000. This element will include the period from 1 January to 30 September.
Wage- and salary-paying businesses will receive at least $2,000, even if they’re not required to withhold tax.
This is estimated to benefit around 7.8 million workers and 700,000 businesses.
On top of that, the government will spend around $700 million over four years to extend the instant asset write-off by raising the threshold from $30,000 to $150,000. Access will also be expanded to include businesses with an annual turnover of between $50 million and $500 million.
The instant asset write-off element will conclude on 1 July.
If you’re a casual worker…
Casual workers who have contracted the illness, or who have to isolate themselves, will be eligible for Newstart payments during that period.
Additionally, the wait time to access that payment will be waived. But not all casual workers are eligible, only those who pass the assets test.
However, the Australian Council of Trade Unions secretary Sally McManus said this is a slap in the face for casual workers.
“Newstart payments are far less than what nearly all casual workers are currently paid, so the financial penalty remains,” she said, warning disincentives to self-isolate put the broader community at risk.
If you’re an apprentice…
Around 117,000 apprentices will receive wage subsidies, with the government sending cash to employers with fewer than 20 staff as part of a $1.3 billion wage subsidy program.
The boost will subsidise apprentice wages for up to nine months and is aimed at keeping those workers employed.
“We say to all of those businesses: ‘We’re doing our bit to support you, we want you to support your staff during this period,’” Finance Minister Mathias Cormann told ABC radio.
If you think you may have Covid-19…
The government on Wednesday announced $2.4 billion would be set aside to deal with the gargantuan health impacts of the virus.
That money would go to “pop-up respiratory clinics” across the country at $205 million. Those clinics will be used to test Australians who are concerned they may be ill and to divert those with minor or moderate symptoms away from GPs and hospitals.
And, Health Minister Greg Hunt said on Wednesday, there will be around $170 million put into a new Medicare pathology test for coronavirus which is aimed at boosting the availability of those tests. They will be tested in aged care homes.
Australian Chief Medical Officer Doctor Andrew Murphy said the aim is to arrive at a same day testing turnaround.
“And that’s going to be our aim throughout this. In terms of aged care we will be specifically looking, because we don’t want to have difficulties in aged care getting testing, we will be looking at pathology companies, possibly going into aged care facilities, taking the tests and coming out to make it easier for the facility and for the residents,” he said on Wednesday.
“But we’re working through those measures.”
If you are a GP…
The 100 fever clinics will be staffed by nurses and doctors and will be able to accommodate 75 patients a day over six months.
Additionally, as part of the $30 million advertising blitz, doctors’ waiting rooms, public transport, TV, radio and social media will be flooded with messaging to attempt to lighten the surging pressure on the public health system.
Another $100 million will go towards a Medicare bulk-billed item that will allow Australians in self-isolation and quarantine to access a GP via Skype or FaceTime.
If you work in aged care…
In addition to the new testing, the aged care workforce will receive a $100 million boost.
“That’s to ensure if there are temporary shortages or additional costs over and above those which they would ordinarily have,” Hunt said.
And aged care facilities will have boosted access to the national stockpile of health and protective supplies, with the government also pledging to pitch in should there be a shortfall.
If you’re Indigenous…
Minister Hunt said Indigenous communities face particular health challenges, noting that transmission also occurs more easily within close communities.
“The primary health systems have emphasised the importance of that,” he said on Wednesday.
He said Indigenous Australians will receive two extra forms of support: a telehealth capacity for more than 50 Indigenous Australians “based on the relative position” and an increased capacity for the retrieval and treatment support for remote Australian communities.
The Northern Territory on Wednesday finalised its plan to tackle any outbreak within Indigenous communities, with NT Health’s Covid-19 plan describing the risk as “severe”. It said overcrowding and a higher prevalence of underlying health conditions within Indigenous communities poses a heightened challenge.
If you work in the tourism sector…
The Tourism and Transport Forum warned Covid-19 could push133,200 Australians out of work as travel bans on China, Iran, Italy and South Korea keep tourists away, and anxiety keeps locals from travelling and spending.
The government has announced a $1 billion fund which will be led by Minister for Tourism and Investment Simon Birmingham.
The coronavirus fund will provide assistance to tourism areas “most heavily” affected by the virus, Frydenberg said.
“It initially will be a $1 billion fund. This will include the waiver of certain fees and charges for tourism businesses operating in Commonwealth National Parks, and the Great Barrier Reef Marine Park, increasing domestic tourism promotion, and additional assistance through Austrade to address supply chain breakdowns,” the treasurer said.
“As occurred with the bushfires, the ATO will also be providing relief for those significantly affected with deferral of various tax obligations by up to four months.”
Goodbye surplus, we never knew you
Frydenberg’s promised surplus will not emerge, Cormann said this morning.
“When you deliver a stimulus package of this size, I think people can add up the numbers,” he told the ABC this morning.
“They can add up what it means in terms of the Budget surplus. We already were under significant pressure with the impact on revenue from the economic impact of the coronavirus. This is not going to be a surplus year in 2019-20.”
The Federal Treasury predicts Covid-19 will slash 0.5 percentage points from Australian GDP in the March quarter.
An anxious wait
Stocks plunged 2.36 per cent in morning trade on Thursday after the coronavirus was declared a pandemic. Hopes the Prime Minister’s announcement would stem the sell-off have not yet been realised, with stocks continuing to shudder lower throughout Morrison’s mid-morning announcement.
National and global share markets have been in freefall since Friday as the virus gathered pace globally.
The ASX suffered its worst day since the Global Financial Crisis on Monday after plummeting 7.33 per cent, worsening to lose a cumulative $235 billion by midday Tuesday.
Source: Yahoo Finance