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The Federal Treasurer has provided a summary of the economic support for households, businesses and the financial system and has praised Australians for their remarkable resilience.
Marking what was originally scheduled to be the unveiling of the Federal Budget on the 12 May 2020, Treasurer Josh Frydenberg instead provided a concise summary of the current unprecedented economic environment, and the support for households, businesses and the financial system that has been provided in response.
Noting the results of the coronavirus as a one in a 100-year event, the Treasurer described Australia as being at war against a faceless and flagless enemy1. With the Australian way of life put on hold, the Treasurer praised Australians for showing remarkable resilience and character.
In addition to paying respect to the health challenges and human cost still playing out around the world, the Treasurer outlined the economic measures the federal government had rolled out to date. These economic measures fall into three categories: support for households; support for business and employment; and support for the financial system.
“For households, our actions are designed to ’cushion the blow’ from the income shock and support consumption across the economy,” the Treasurer said.
These measures include:
The government effectively doubled unemployment benefits with the introduction of a temporary $550 per fortnight coronavirus supplement for jobseekers. This payment will run until 24 September 2020 after which it will reduce to $250 per fortnight until 31 December 2020.2
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The government announced that individuals affected by coronavirus can apply to access up to $10,000 of their superannuation in 2019-20 and up to a further $10,000 in 2020-21.
The Government is providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders. The first payment was made from 31 March 2020 and the second payment will be made from 13 July 2020.
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In response to the current low interest rate environment, the Government has reduced the deeming rate effective 1 May 2020. The Government expects the change to benefit around 900,000 income support recipients, including age pensioners3.
The Government announced a temporary reduction to superannuation minimum drawdown requirements for account-based pensions (such as QSuper’s Income account) and similar products by 50% for 2019-20 and 2020-21.
The Treasurer stated this package would see more than 1 million families receiving free childcare for a period of time.
The Treasurer also stated that the Government had worked with banks and the prudential regulator to help households with access to temporary relief from loan repayments. Find out more on the APRA website.
“The motivation (for the measures directed at business) has been to encourage investment, boost cash flow, maintain the connection between employer and employee and provide a regulatory shield and more workplace flexibility while preserving as much capacity across the economy as we build a bridge to the recovery phase,” the Treasurer said.
Many employers may be able to retain employees amid the coronavirus health emergency by taking advantage of the Australian Government’s JobKeeper payment scheme.
The Government is providing up to $100,000 to eligible small and medium-sized businesses, and not for-profits (NFPs) that employ people, with a minimum payment of $20,000.
Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage for nine months from 1 January 2020 to 30 September 2020.
The Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive.
The Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access.
“A great strength of the Australian economy during this crisis has been the resilience of our financial system,” the Treasurer said.
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1. Ministerial Statement on the Economy, Parliament House, Canberra, 12 May 2020.2. Media release, Prime Minister, Treasurer, Minister for Families and Social Services, 21 July 2020, https://www.pm.gov.au/media/jobkeeper-payment-and-income-support-extended
3. Joint media release, The Hon. Scott Morrison MP (Prime Minister), The Hon. Josh Frydenberg MP (Treasurer), 22 March 2020.
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