Coronavirus: Australian government announces $130b support package

The government has unveiled a massive $130 billion support package for businesses and workers. This is who will be eligible for the payments.

The government has announced a new $130 billion support package in order to help businesses keep their employees during the coronavirus crisis.

Prime Minister Scott Morrison announced the package this afternoon, saying it will span over the next six months.

“We are committing $130b over the next six months to support the jobs and livelihoods of what we anticipate of being almost 6 million Australians who will need that lifeline in the months ahead,” Mr Morrison said.

The policy involves paying employers $1500 per fortnight for each employee they keep on over the next six months. It’s been nicknamed the “Jobkeeper” allowance.

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The Jobkeeper payments will be available to full-time workers, part-time workers, sole traders and casual workers who have been with their employer for 12 months or more.

New Zealanders living in Australia on 444 visas will also be able to access the payments through their employers.

Payments will flow from the first week of May but will be backdated to today.

Businesses will be required to keep the employee on their books in order to distribute the payment.

Prime Minister Scott Morrison has announced a new $130 billion package to help employees. Picture: Mick Tsikas/AAP

It will be a flat-rate of $1500 per fortnight for each employee regardless of what they usually earn, with employers able to add extra payments on top of this if they wish.

“There is not more support for some than there is for others. That is not the Australian way,” Mr Morrison said.

“If one person falls on a hard time, if anyone falls on a hard time, it is the same hard time. We are all in this together. That is what is fair. That is what is Australian.”

In order to apply for the payments, businesses will need to prove their turnover has dropped by at least 30 per cent.

Companies with an annual revenue of $1 billion will need to prove a 50 per cent drop.

The PM said the Jobkeeper payment was “to keep Australians in their jobs even when the work dries up”.

“This plan is about keeping those businesses together and keeping these employees in those businesses,” he said.

“Our plan will see our businesses large and small, right across our entire economy share the load with our welfare system to deliver these important income supports.”

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Treasurer Josh Frydenberg did the rounds on morning TV today to hype up the announcement, along with the separate news that all foreign investments will now require approval from the government.

“Employers watching the show this morning – we want to work with you to keep staff employed,” he said on Sunrise.

“Keeping that connection between employer and employee is very important.”

The government’s announcement WAS pre-emptively compared to a similar wage subsidy scheme introduced by the United Kingdom, where Boris Johnson’s government is covering 80 per cent of businesses’ wage bills.

On Today, Mr Frydenberg downplayed that comparison.

“We are not adopting the UK system. We will have an Australian system and we will have one which is based on existing tax and welfare system mechanisms, because that is really important in getting money to people as quickly as possible,” he said.

Employees will now be eligible for $1500 fortnightly payments under the new plan.

Host Karl Stefanovic suggested “the devil is in the detail”, asking how exactly the new scheme would work.

“Karl, you will have to switch on later today,” the Treasurer replied.

“The key point here is we want to keep the employer and the employee formally connected, because on the other side of the coronavirus, we want businesses to bounce back stronger than ever. By having people still connected to their employer, that will help that recovery phase, as well as obviously through this process providing increased incentives for people to stay in employment.

“I think from an economic point of view it is important to support businesses who need to remain open to stay open, and it is important to provide that support to employees as well to get to the other side.”

"What Australians are learning through this crisis is that the government has their back." Treasurer @JoshFrydenberg the government's plan to announce new policies and stimulus packages to support economy recovery. #9Today pic.twitter.com/P1ncUQ0cb4

— The Today Show (@TheTodayShow) March 29, 2020

Prime Minister Scott Morrison foreshadowed the wage subsidy announcement at both of his press conferences yesterday.

“The last (stimulus) package that we announced was about broadening and strengthening the safety net for those who are going to be immediately impacted by the shock of losing their jobs,” he said on Sunday morning.

“The next stage, which will be even bigger than anything you have so far seen, will go broader than that and ensure that we are working together with companies to keep people connected to those companies.

“This is part of the hibernation strategy of ensuring that we keep people connected with businesses and with their jobs so that on other side of this, Australia can bounce back stronger.”

He, too, brushed aside comparisons to the United Kingdom.

“We are being very careful to ensure that income support can be delivered in a way that gets it to people as quickly as possible using the existing systems that we have,” said Mr Morrison.

“When we do these things it is not a matter of just cutting and pasting ideas from other places. We need to have solutions that will work in Australia.

“You cannot just cut and paste somebody else’s system, because we have seen in many other jurisdictions that are putting these in place, they are having to rapidly redesign and change them. You have got to have more detail from the outset to ensure you have the most effective implementation.”

And the Prime Minister directly urged businesses not to make any decisions about their future until the new package was announced.

“I would say to employers, who I know are going through very difficult times, these changes will be announced soon. And I would ask that before you make any further decisions, that you take the opportunity to see the further measures that the government will be announcing,” he said.

A few hours later, after the National Cabinet meeting, Mr Morrison said the government would be “working through the night” to pull together the “next tranche in our economic supports”. What a delightfully bureaucratic turn of phrase.

“They can be there to support Australians in jobs and to keep them in jobs, and to keep them connected to the companies that will be there on the other side,” he said.

The other announcement flagged by Mr Frydenberg this morning was that temporary change to Australia’s foreign investment framework.

All proposed foreign investments into Australia will require approval from the Foreign Investment Review Board.

Treasurer Josh Frydenberg at a press conference. Picture: Mick Tsikas/AAP

In normal times, there is a monetary threshold at which proposed investments must be reviewed. In simple terms, this change involves getting rid of that threshold while the coronavirus pandemic is ongoing.

During his appearance on Today, the Treasurer was asked whether the move was a “crackdown against overseas raiders”.

“We want to stop predators who are acting against the national interest. So we want to have scrutiny and visibility over all foreign investment proposals, regardless of their monetary value,” Mr Frydenberg said.

Stefanovic asked whether the change was motivated specifically by Chinese companies.

“This is not about one particular country, but about ensuring that the national interest is enhanced,” said Frydenberg.

“When you consider what is in the national interest, it is obviously national security grounds, it is the character of the investor, it is competitions issues, it is tax issues, and that is what I as the Treasurer and the Foreign Investment Review Board will assess every foreign investment proposal against.”