Who will get a stimulus payment?
The package targets five major groups. Here’s what each will receive:
- Welfare recipients: an extra $750 per person
- Small businesses with apprentices: up to $21,000 to keep apprentices in work through wage subsidies
- Small to medium-sized businesses: between $2,000 and $25,000 to help with cashflow
- Businesses generally (excluding the very largest): the instant asset write-off threshold raised to $150,000 and an extra depreciation discount to encourage investment
- Affected businesses: access to a new $1 billion fund
Who gets the $750 in cash?
The only measure targeted at households or individuals is a $750 cash payment to welfare recipients.
That includes those on Newstart, the disability support pension, carers’ allowance, youth allowance, veterans support payments, family tax benefits, the Commonwealth senior health card-holders and aged pensioners. In total, 6.5 million people are expected to receive the payment, including 2.4 million pensioners.
People who already receive these payments will get the cash, as well as people who make a claim for one of the eligible payments by the end of March 12 and the claim is granted.
Why aren’t others getting money?
Mr Morrison said the focus of the stimulus was businesses “because our goal is to keep people in work”.
There has been concern that payments made to individuals may not be spent and would instead land in savings accounts.
The Prime Minister has given money to those already on welfare hoping payments to these people – rather than Australians with jobs and perhaps better finances – will circulate through the economy.
“It is about a cash injection into the Australian economy, which supports small businesses and supports medium businesses,” he said. He also confirmed that all measures were temporary, meaning while welfare recipients receive a short-term cash boost, payment rates remain fixed.
How quickly will the money be paid?
The Government promised that payments to welfare recipients will start on March 31, 2020.
More than 90 per cent of payments are “expected to be made” by mid-April.
Legislation will be introduced into Parliament later this month to give effect to these measures. All legislation is expected to pass.
Treasurer Josh Frydenberg said $11 billion of the $17.6 billion package would be paid by the end of June.
What do businesses have to do to get paid?
Cash flow support for businesses will arrive by way of payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from April 28, with refunds to then be paid within 14 days. Businesses will be able to register for apprentice wage subsidies from April 2, but more than $1 billion of this $1.3 billion measure isn’t budgeted until next financial year.
Business claiming tax write-offs will benefit the next time their tax is calculated, while benefits from the depreciation deduction will extend to June 30, 2021.
How much is this costing taxpayers?
All up, the stimulus package is worth $17.6 billion.
The cash payments to small and medium businesses is the largest component of the package, worth around $8 billion.
Changes to the instant asset write-off and deprecation deduction tally around $4 billion. The payments to welfare recipients tally close to $5 billion.
Will we get more money?
The initial stimulus package from the Rudd government in response to the global financial crisis (GFC) was worth $10 billion, while a second three months later was worth $42 billion. Mr Morrison indicated earlier this week that the economic impact of the coronavirus could be worse than the global financial crisis.
He flagged there might be more spending in the May budget, but said in relation to Thursday’s announcement: “We believe these measures are the measures that can do the job and we will continue to monitor events as we go forward.”
South Australia has announced its own $350 million stimulus focused on construction work.
State and territory leaders are meeting with the Prime Minister on Thursday night and will discuss further measures.
