Scott Morrison throws out a $66bn lifeline and says there’s more help to come

PM says $66bn rescue package will be followed by even more support as virus crisis deepens.

Scott Morrison on Sunday said, ‘there will be more issues that even now haven’t presented themselves or even couldn’t be conceived at this point with what we may face over the next six months’. Picture: AAP

Scott Morrison says an unprecedented $66bn rescue package — including allowing struggling individuals to draw funds from retirement savings and giving small businesses new subsidies of up to $100,000 to retain staff — will be followed by even more support to get the ­nation through the worst global challenge in a century.

The new proposals announced on Sunday, which are designed to cushion workers and protect small businesses from the worst of the economic blows of the coronavirus, also include a doubling of welfare payments.

PDF: Stimulus at a glance

The Treasurer said the global and the domestic economic environment had deteriorated sharply since the government’s first stimulus package was detailed just over a week ago. “We now expect the economic shock to be deeper, wider, and longer,” Josh Frydenberg said.

Treasurer Josh Frydenberg during a press conference at Parliament House in Canberra on Sunday. Picture: Gary Ramage

Under the latest measures, welfare recipients will receive an extra $550 a fortnight on top of their benefits for the next six months, essentially doubling the dole.

During this period, waiting times and asset tests for the Jobseeker Payment (formerly known as Newstart) will be waived. The expanded income support will become eligible from April 27, at a cost of $14bn across this financial year and the next.

There will also be an extra one-off $750 payment for welfare recipients and veterans, on top of the $750 announced for them in the last round of stimulus measures. The first payment will be made from March 31 and the second from July 13, at a cost of $8.8bn.

Jobseekers, casuals and sole traders will also now be able to tap into their retirement savings to help them get through the crisis. People will be able to apply to access up to $10,000 before July 1 through the Australian Taxation Office, and another $10,000 in the first three months of the new financial year.

Scott Morrison said there would be more packages announced in coming weeks.

“There will be more issues that even now haven’t presented themselves or even couldn’t be conceived at this point with what we may face over the next six months,” he said.

Mr Frydenberg said the newly relaxed access to superannuation would not significantly affect the sector, despite protests from Labor and the trade unions that it represented the first step on the road to a more substantial dismantling of the country’s compulsory superannuation system.

“This comprises less than 1 per cent of the $3 trillion in superannuation today,” the Treasurer said.

“APRA, the prudential regulator, has advised the government that they do not expect this initiative to have a significant impact on the industry overall.”

The government also extended and broadened its measures — announced only 10 days prior — that are aimed at boosting cashflows for small businesses to encourage them to keep workers on staff through the crisis.

Small and medium enterprises (SMEs) will now get a direct cash injection in this financial year of up to $100,000 to help pay bills and keep staff members in their jobs, with a minimum payment of $20,000. Businesses — and now charities — with employees and turnovers of up to $50m will be eligible to receive the money, and the government has pledged to pay the same amount in the first few months of the next financial year at a total cost of $31.9bn.

Employers will also receive payments equal to 100 per cent of the tax businesses withhold from staff wages, up from 50 per cent.

The minimum payment under this measure will rise from $2000 to $10,000, and the maximum payment will be boosted from $25,000 to $50,000. The threshold on insolvency and bankruptcy will also be raised to ensure that small businesses are able to survive through to the end of the pandemic. Furthermore, businesses will not have to respond to creditors for six months, and creditors will not be able to chase companies until they owe more than $20,000, up from $2000 under the current law.

The Morrison government also committed to introducing a six-month change to bankruptcy and insolvency laws to provide company directors more flexibility to trade through difficult circumstances and keep local employers afloat.

In a further measure, the federal government will move to support the childcare sector by increasing the number of days a family can claim a subsidy when their child is absent from a childcare centre.

The government will introduce legislation on Monday that will also waive the obligation of childcare services to require a family to pay gap fees if an operation closes.

Education Minister Dan Tehan said the reforms would help about 1.3 million families who have children in childcare.

“We are making changes to ensure Australian families will continue to receive financial support through the childcare subsidy if their children can’t attend childcare because of COVID-19,” Mr Tehan said.

“By paying the childcare subsidy to services that are forced to close temporarily, we are providing financial support to businesses to pay their staff and remain viable so they can reopen when it is safe to do so. It is expected the stimulus package will be passed in full on Monday when parliament sits with a reduced number of MPs, but Mr Morrison said he was prepared to sit longer to pass the legislation.

Opposition Treasury spokesman Jim Chalmers said Labor would not stand in the government’s way. However, he criticised the $100,000 wage subsidies to small business and the timeline for payments to reach both workers and employers.

Additional reporting: Greg Brown.