Since the Morrison Government announced its first stimulus package just over a week ago, the global and domestic economic environment has deteriorated.
We now expect the economic shock from the coronavirus to be deeper, wider and longer.
Every arm of government and industry is working to keep Australians in jobs, and businesses in business as we build a bridge to recovery on the other side of the coronavirus.
Yesterday, the Government announced a second $66 billion package designed to support businesses and cushion the blow for households with an unprecedented enhancement of Australia’s safety net.
It is consistent with our principles of being targeted, temporary, scalable and using our existing systems.
Total government support for the Australian economy announced over the last 10 days is $189 billion or 9.7 per cent of GDP.
The package has three parts:
■ 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.
The Government is doubling the jobseeker allowance formerly known as Newstart through the introduction of a temporary coronavirus supplement.
The coronavirus supplement will provide an additional $550 a fortnight on top of the existing jobseeker or Newstart allowance and will be available to sole traders and casual workers who meet the income test.
This means anyone eligible for the maximum jobseeker payment will now receive more than $1100 a fortnight, effectively doubling the payment.
In the first package on March 12 we announced a $750 payment for Australians on income support.
More than 600,000 people will receive this payment in WA. Yesterday we announced that from July 13, a further $750 payment will be made to those on income support and who are not eligible for the coronavirus supplement.
This includes those receiving the age pension, the carers’ allowance, family tax benefits and the commonwealth senior health card.
Our economic response will also allow those Australians in financial stress as a result of the coronavirus to access more of their own money in superannuation.
From April, those affected will gain early access to their superannuation capped at $10 000 this financial year and a further $10 000 in the following financial year.
These withdrawals will be tax free and available to those who are eligible for the coronavirus supplement as well as sole traders who have seen their hours or income fall by 20 per cent or more as a result of the coronavirus.
The second part of our package sees a massive scaling up of our support for small and medium-sized businesses. We are increasing cash payments to SMEs from up to $25,000 to up to $100,000 to boost their cash flow and HELP keep their workers employed.
We are also extending this measure to around 30,000 not-for-profit organisations with an annual turnover of less than $50 million.
This will be a lifeline for hundreds of thousands of employers like the local hairdresser, cafe owner and mechanic whose income has been significantly reduced over this difficult period.
This will support the jobs of around 810 000 workers in WA.
The Government is also guaranteeing loans to small businesses in a 50/50 partnership with the banks and other lenders.
This $40 billion scheme, which will start in early April, will provide loans of up to $250,000 for up to three years to businesses with a turnover of up to $50 million. No repayments will be required for the first six months.
The third part of our package will provide a regulatory shield for what are otherwise profitable and viable businesses that find themselves under severe financial pressure as a result of the coronavirus.
Now is the time for more flexibility in our insolvency and bankruptcy laws, to keep these businesses alive and trade through this period. These extraordinary times demand extraordinary measures.
Yesterday’s announcement will provide the hope and support millions of Australians need. We know there will be more to do and we will continue to do what it takes.
Josh Frydenberg is the Federal Treasurer