- On Sunday morning, the government announced details of its $66 billion second coronavirus stimulus package – with stimulus efforts now totalling $189 billion.
- Included in the package, which is intended to “supercharge the social safety net”, is an increased Jobseeker payment, payments for small business, and the ability to draw superannuation due to financial crisis.
- Prime Minister Scott Morrison flagged that further stimulus efforts are likely.
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The federal government today announced details of its “unprecedented” $66 billion second stimulus package to “cushion the blow” of the coronavirus on the economy – a stimulus effort which now totals $189 billion, or around 10% of the economy.
“We will be focusing on those in the front line, those who will be filling the first blows of the economic impact of the coronavirus,” Prime Minister Scott Morrison said in a press conference on Sunday morning, in announcing measures which he said would “supercharge the social safety net”.
Morrison flagged that it was likely further stimulus efforts would be required, and that this one was focused on those who would suffer the most from the initial economic blow of the coronavirus.
Here’s everything the government announced:
- An effective doubling of income support for those on the JobSeeker payment. The payment, formerly known a Newstart, will be supplemented with an additional $550 per fortnight, bringing it to a total of $1,100 per fortnight. This will also apply to, for example, sole traders who have found their work has dried up due to the coronavirus. The assets test and the waiting period have been abolished. The income test still applies.
- A further $750 payment – on top of the first one – for those on income support who are not eligible for the coronavirus payment. For example, this would include people on the aged pension or carer’s allowance. It will benefit about five million people.
- The ability to withdraw super, for those who are facing coronavirus-led financial hardship. Those eligible will be able to draw down $10,000 of their super this financial year, and $10,000 next financial year. The minimum superannuation drawdown requirements for retirees will be cut by 50 per cent for the next two financial years, and the deeming rate has been reduced in line with Reserve Bank cuts.
- Cash payments for small to medium businesses. This is the largest part of the package. All employing small businesses will receive at least $20,000, and larger small businesses will receive up to $100,000.
- More money into the financial system. In addition to an injection of $105 billion, with the intention of increasing the availability of credit, the government would guarantee in a 50/50 partnership more lending to small-to-medium businesses. This would include loans of up to $250,000 over 3 years – with no payments required for 6 months.
- Increased flexibility in insolvency and bankruptcy law. This includes increasing the threshold at which a creditor can pursue insolvency proceedings – from $2,000 to $20,000 – and giving people up to six months to respond, over the current 21 days. Most significantly, businesses will be able to trade while insolvent.
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