Government pledges cash injection to save economy from coronavirus
One-off cash payments to pensioners and welfare battlers and handouts of up to $25,000 for small businesses will be the centrepieces of a $20 billion shot in the arm for the economy to try to stave off a coronavirus-led recession.
National
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Cash for businesses who keep apprentice tradies employed and one-off payments to pensioners will be part of a stimulus package worth up to $20 billion to rescue Australia’s economy.
In a bid to fend off an economic recession, Prime Minister Scott Morrison will on Thursday announce the federal government will give up to $25,000 to small-to-medium sized businesses which employ about 7.8 million Australians, to improve cash flow.
This measure is estimated to cost $6.7 billion over four years.
More than 30,420 Victorian apprentices will also have their wages subsidised by $7000 a quarter to keep them in a job until work picks up again.
An asset write-off scheme will be available to companies instantly, allowing them to claim back tax on purchases up to $150,000 before July 1.
It is hoped the incentive will see up to 3.5 million businesses spend big on trucks, utes, harvesters, kitchen equipment or tools.
The Herald Sun understands the package will also include one-off cash payments of about $700 for pensioners and some welfare recipients.
More measures are due to be announced on Thursday, including the possibility of sick leave payments for casual workers affected by the spread of the coronavirus.
The PM said the looming international economic crisis was being met with a targeted approach.
“Our stimulus package will focus on keeping Australians in jobs and keeping businesses in business so we can bounce back strongly,” he said.
“The economy needs temporary help right now to bounce back better, so the livelihoods of all Australians are protected.”
Federal Treasurer Josh Frydenberg said the measures were designed to keep “businesses in business” and to provide stimulus to households
“(This) announcement will provide the support businesses need to stay in business and keep Australians in a job,” he said.
“By acting decisively, this package will put Australia in the strongest possible position to deal with the economic challenges we face and to make sure our economy bounces back even stronger.”
The cash splash comes after Victorian Treasurer Tim Pallas on Wednesday appeared to make a U-turn on an assurance he made last week that the state budget would remain in the black. “I’m neither confirming nor denying the existence of a surplus,” he said.
“My number one priority at the moment is the health and welfare of Victorians and putting whatever resources are necessary into that crisis.
“The state is going through every item line by line (and) we are making sure that the taxpayer is getting value for money,” he said.
Mr Pallas said government services would not be cut as more money was spent on health and a growing population.
It is expected COVID-19 will deliver a $7 billion hit to the state’s economy and reduce growth by 0.5 per cent.
“The emergence of coronavirus represents a significant risk for the nation and a historic challenge for the world economy,” he said.
“We can expect that there’ll be a very substantial downgrade in the (GST) pool, largely because consumption in the market is going off.
“Despite the fact that some are trying to have a toilet roll-led recovery … the reality is the retail numbers are soft.”
Mr Pallas said the loss of foreign students would be a major issue.
KEY PLANKS OF THE BUSINESS STIMULUS PACKAGE
$6.7 BILLION CASH INJECTION
A one-off, tax-free $2000 to $25,000 cash handout for eligible small to medium businesses with a turnover of less than $50 million
690,000 businesses eligible, employing 7.8 million people
The handout will be equal to 50 per cent of the amount of tax the business withholds to the ATO, up to $25,000
$1.3 BILLION APPRENTICE RESCUE PLAN
Payment of up to $7000 each quarter per apprentice to small businesses to keep 120,000 apprentices in jobs, including 30,420 in Victoria
The scheme will give businesses with less than 20 full-time employees a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage from January 1 to September 30 this year
The wage subsidy will be able to be transferred to a business of any size if the apprentice is let go and they are re-employed
The apprentice must have been in training as of March 1
Employers can register for the subsidy from April 2
$700M BOOST TO BUY TOOLS OF TRADE
An increase in the threshold for the Instant Asset Write-Off from $30,000 to $150,000 so businesses can buy items that help them operate, including such things as cars, utes, trucks and harvesters, as well as tools and equipment for kitchens
Expansion of the Instant Asset Write-off to businesses with an annual turnover of up to $500 million
About 3.5 million businesses eligible
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Originally published as Government pledges cash injection to save economy from coronavirus