Government’s $66 Billion Coronavirus Stimulus Package
This support package includes:
- Support for households including casuals, sole-traders, retirees and those on income support
- Assistance for businesses to keep people in a job
- Regulatory protection and financial support for businesses to stay in business
Key elements of the $66.1bn second-round stimulus package for business owners:
- Eligible not-for-profits and businesses with a turnover less than $50m will receive a tax-free payment from $20,000 to $100,000 in an expansion of the cash flow measure announced in the first package
- Introduction of a loan guarantee scheme would see Government partnering with lenders to guarantee unsecured loans of up to $250,000
- Temporarily doubling the Jobseeker Payment, previously called Newstart
- Allowing people to access $10,000 from their superannuation in 2019-20 and 2020-21
- Guaranteeing unsecured small business loans up to $250,000
- Reducing deeming rates by a further 0.25 per cent
‘Boosting Cash Flow for Employers’ expands to not-for-profit sector
Originally announced as a tax-free payment of between $2000 and $25,000 for businesses with turnover up to $50 million, the Government’s plan to boost cash flow has been expanded in size and scope.
The initiative now covers not-for-profits, including charities, and small businesses with a turnover under $50 million, with eligible companies receiving between $10,000 and $100,000 from the 28th of April as a credit on their activity statements from the Australian Tax Office.
“By linking the payments to business to staff wage tax withholdings, businesses will be incentivised to hold on to more of their workers,” said Morrison.
Further, eligible businesses can expect an additional payment, equaling the total of all ‘Boosting Cash Flow for Employers’ payments made in 2019-20, to be made available from 28 July 2020.
This means if an eligible business received the minimum $10,000 payment, it can expect an additional $10,000 soon after.
Government guarantee of unsecured loans up to $250,000
Dubbed the ‘Coronavirus SME Guarantee Scheme’, the Government has proposed to guarantee 50 percent of new loans issued by eligible lenders to small-to-medium enterprises (SMEs).
This initiative aims to further enhance lenders’ willingness and ability to provide credit, in concert with a previous announcement the Government made to make access to credit quicker for small businesses.
The nature of the proposal would see the Government guaranteeing up to $20 billion to support $40 billion in SME loans in total.
Access to superannuation up to $20,000
The Government will allow people to access up to $10,000 from their superannuation this financial year and in 2020-21.
People will not pay tax on the money they access, and withdrawals will not affect Centrelink or veterans’ payments.
There will also be a temporary 50-per-cent reduction in superannuation minimum drawdown requirements for account-based pensions in 2019-20 and 2020-21.
Cash for welfare recipients
The second $750 payment will be automatically paid to an estimated 5 million people on July 13. The first $750 payment, announced in the first stimulus package, will be paid on March 31.
The Government will temporarily double the Jobseeker Payment, previously called Newstart, providing people with an additional $550 a fortnight.
The payment will be available to sole traders and casual workers, provided they meet income tests. The Government will waive asset tests and waiting periods to access the Jobseeker Payment.
“The nature of these payments and the purpose of these payments are changing,” the Prime Minister said.
“This is clearly saying that we expect this to go on for some time and we know that those vulnerable groups may need additional income support during those periods.”
Yan (Jenny) Qi CA
Founder of Progress CA Pty Ltd
Tel. no. 0403 050 779