We live in challenging and unprecedented times with the outbreak of Coronavirus.
In response, the Commonwealth and State Governments and the Reserve Bank of Australia have introduced measures — equivalent to $189 bn or 10% of the economy — to “build a bridge” to support households, businesses and the broader economy from the outbreak.
Across the various programs, you may be eligible for:
Instant asset tax write-off
Payroll tax relief;
Concessional loans;
Job Seeker Allowance;
Early access to superannuation; and
Other measures.
Banks have also introduced measures to provide mortgage and small business relief.
Further details are below.
What is the impact on Government and your Advocacy?
These stimulus measures are the largest in the nation’s history, and only the tip of the iceberg.
As PM Morrison stated yesterday: “there will be more issues that even now haven’t presented themselves or couldn’t be conceived at this point with what we may face over the next six months.”
Government will be looking to business to introduce new stimulatory measures and/or amend our current business practices to ensure we come out of this smoothly. For example, changes to laws to insolvency trading and bankruptcy laws will be introduced to ensure businesses can keep operating.
Engaging with Government is still critical to ensure that your organisation’s or industry’s problems are resolved with as little disruption.
Further details of various Federal and State Stimulus measures (see links in package amounts)*
Commonwealth Government: A total package of $A66.1 bn that includes: JobSeeker payment, early release of superannuation, increased government payment for small and medium businesses.
This is on top of the first package of $17.6 bn that focused on: increasing the instant asset tax write-off, investment incentives, boosting cash flow for SMEs, and payments to pensioners and other income support recipients.
New South Wales: $2.3 bn stimulus package that includes: waiving payroll tax, removing a range of fees and charges from small businesses and bringing forward maintenance on public assets, including social housing.
Victoria: $1.7 bn economic survival and jobs package that includes: payroll tax refunds, rent relief and $500 million Business Support Fund established to support various sectors (hospitality, tourism, accommodation, arts and entertainment, and retail).
Queensland: $500m for a concessional loan facility to ease the effects of COVID-19 on Queensland businesses and keep employees working; as well as $27.25m assistance package and payroll tax deferrals for small and medium sized businesses. Full statement here.
South Australia: $350m stimulus package to include major road and hospital upgrades to significant tourism infrastructure and increased funding for the state’s Economic and Business Growth Fund to support industry sectors.
Western Australia: $607m stimulus package with most of it ($402m) to freeze household fees and charges until at least July 1, 2021. Freeze will apply to entire ‘household basket’, including electricity, water, motor vehicle charges, emergency services levy and public transport fares.
Tasmania: $420 m stimulus package including Emergency Relief Payments for those in isolation and Accommodation support.
ACT: economic survival package injecting $137 m, with rebates of $150 for Canberra households, as well as a freeze on a number of ACT Government fees and charges, including the fire and emergency services levy, public transport, vehicle registration and parking fees.
Reserve Bank of Australia
RBA cut the cash rate by 25bp to 0.25%, and launched unconventional Monetary Policy to target yields (through quantitative easing) for 3-year Australian Government bond yields, and other measures to support authorised deposit-taking institutions (ADIs).
Australian Banking Association
Australian banks will defer loan repayments for 6 months for small businesses who need assistance because of the impacts of COVID-19.
Individual banks have also introduced moratoriums for mortgage repayments and other lending.
Disclaimer: While Advisory Street endeavours to provide timely advice, the policy environment continues to evolve very quickly given the severity of the crisis. Please review the appropriate websites for the most timely information.
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