The federal government has announced a $A17.6b ($NZ18.2b) economic stimulus package in a bid to keep Australians in jobs as the economy takes a hit from the spread of coronavirus.
Prime Minister Scott Morrison says the biggest beneficiaries of a new package will be senior citizens. Photo: AFP / Getty Images
Prime Minister Scott Morrison said the package would provide an immediate stimulus to the economy amid fears Australia could slip into a recession.
The package includes tax relief for small businesses, one-off cash payments for welfare recipients and money to help keep apprentices in work.
More than six million welfare recipients, including pensioners, carers, veterans, families, young people and jobseekers will get a one-off cash payment of $750 from 31 March.
"The biggest beneficiaries of that will be pensioners," Morrison said.
"They comprise around half of those who will receive those payments, but they also will be extended to those in family tax benefits, which obviously goes to those in earning households."
The one-off payments will cost the government $4.8b, and Morrison said he believed recipients would have the "common sense" to spend the money in ways which would benefit the economy.
"It's not for us to tell those Australians how to spend their money," Treasurer Josh Frydenberg added.
"But what we do know from experience is that they will spend that money, and that money will encourage economic activity.
"And the more economic activity that we see through the June quarter, in particular, will be important."
Treasurer Josh Frydenberg, left, wants Australians to spend money over the next three months, helped in part by a support package he has unveiled with Prime Minister Scott Morrison. Photo: AFP
Morrison said casual workers who contracted Covid-19, or had to isolate themselves, would be eligible for a Newstart welfare payment while out of work.
The typical wait time to access the payment will be waived, but people will face an assets test before receiving the money.
The government will spend $11b before the end of this financial year, with the remainder to be injected into the economy before July 2021.
The government wants its stimulus to be temporary and offer an immediate boost to the economy rather than making permanent changes to the budget.
Support payments for apprentices
Nearly 700,000 small and medium businesses will receive cash payments of between $2000 and $25,000 to help pay wages or hire extra staff.
The measure is the largest part of the package, and is estimated to cost $6.7b.
The stimulus package also includes $1.3b in support payments to keep apprentices in their jobs amid fears the spread of the coronavirus could have a crippling effect on employment.
The government yesterday allocated $2.4b for a health package, including 100 pop-up coronavirus fever clinics and a new Medicare item to deliver health advice remotely.
Medium and big businesses will be encouraged to spend on equipment and other investments through an extension of the instant asset write-off, which means they can claim a tax break for what they spend.
This is currently restricted to companies with turnovers of up to $50 million, for maximum investments of $30,000.
But this will be significantly lifted, allowing companies with turnovers of up to $500 million to make assets write-offs of up to $150,000.