Member for Riverina and Deputy Prime Minister Michael McCormack has welcomed the Australian Government’s $17.6 billion economic stimulus package, saying it will help keep rural and regional businesses open and people in jobs during the coronavirus crisis.
“I’m particularly pleased $1 billion has been budgeted to support regions and communities which have been disproportionately affected by the economic headwinds the coronavirus has created, including those heavily reliant on industries such as tourism, agriculture and education,” Mr McCormack said.
“Tourism, agriculture and education are three important pillars of the Riverina and Central West economy and we need to back them all the way.”
Mr McCormack also welcomed the strong emphasis on supporting small and medium businesses, keeping apprentices and trainees in jobs and household stimulus payments which will benefit the wider community.
The package has four parts:
• Supporting business investment
• Providing cash flow assistance to help small and medium sized business to stay in business and keep their employees in jobs
• Targeted support for the most severely affected sectors, regions and communities
• Household stimulus payments which will benefit the wider economy. Some 6.5 million individuals and 3.5 million businesses will be directly supported by the package,
which comes a day after the Government announced a $2.4 billion coronavirus health package.
Delivering support for business investment
• $700 million to increase the instant asset write off threshold from $30,000 to $150,000 and expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. For example, assets which may be able to be immediately written off are a concrete tank for a builder, a tractor for a farming business and a truck for a delivery business.
• $3.2 billion to back business investment by providing a time limited 15-month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase. These measures start today and will support more than 3.5 million businesses (more than 99 per cent of businesses) employing more than 9.7 million employees or three in every four workers. The measures are designed to support business sticking with investment they had planned and encouraging them to bring investment forward to support economic growth over the short term.
Cash flow assistance for businesses
• $6.7 billion to boost cash flow for employers by up to $25,000 with a minimum payment of $2,000 for eligible small and medium-sized businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million which employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax free. This measure will benefit around 690,000 businesses employing around 7.8 million people. Businesses will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.
• $1.3 billion to support small businesses to support the jobs of around 120,000 apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the
apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer who employs that apprentice.
• The Government is also offering administrative relief for certain tax obligations, including deferring tax payments up to four months. This is similar to relief provided following the
bushfires for taxpayers affected by the coronavirus, on a case-by-case basis. Stimulus payments to households to support growth
• $4.8 billion to provide one-off $750 stimulus payments to pensioners, social security, veteran and other income support recipients and eligible concession card holders. Around half of those who will benefit are pensioners. The payment will be tax free and won’t count as income for Social Security, Farm Household Allowance and Veteran payments. It will be one payment per eligible recipient. If a person qualifies for the one-off payment in multiple ways, they will only receive one payment. Payments will be from 31 March 2020 on a progressive basis, with more than 90 per cent of payments expected to be made by mid-April.
Assistance for severely affected regions
• $1 billion to support those sectors, regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those
heavily reliant on industries such as tourism, agriculture and education. This will include the waiver of fees and charges for tourism businesses which operate in the Great Barrier Reef Marine Park and Commonwealth National Parks. It will include assistance to help businesses identify alternative export markets or supply chains. Targeted measures will be developed to further promote domestic tourism. Further plans and measures to support recovery will be designed and delivered in partnership with affected industries and communities.
Media release: The Hon Michael McCormack MP