$10b cash splash to boost business
CASH for businesses who keep tradies employed and one-off payments to pensioners will be part of a stimulus package worth more than $10 billion to save Australia’s economy from a coronavirus wrecking ball.
In a bid to fend off a national economic recession, Prime Minister Scott Morrison will today announce the Federal Government will give up to $25,000 to companies that collectively employ about 7.8 million Australians to improve cash flow.
This measure is estimated to cost $6.7 billion over four years.
An asset write-off scheme will be available to companies instantly, allowing them to claim back tax on purchases up to $150,000 before July 1.
It is hoped the incentive will see up to 3.5 million businesses spend big on trucks, utes, harvesters, kitchen equipment or tools.
It is understood the package will also include one-off cash payments to people on Newstart or Youth Allowance and pensioners.
Further stimulus measures are expected to be announced today, including the possibility of sick leave payments for casual workers affected by the virus’s spread.
The Prime Minister said the looming international economic crisis was being met with a targeted approach.
“Our targeted stimulus package will focus on keeping Australians in jobs and keeping businesses in business so we can bounce back strongly,” Mr Morrison said.
“The economy needs temporary help right now to bounce back better so the livelihoods of all Australians are protected.”
Mr Morrison also flagged casual workers worried about losing income while self-isolating should consider existing welfare payments, such as a sickness allowance of $519 a fortnight for singles.
“If you find yourself, and you’re a casual employee, and you obviously don’t have the same benefits of those who are permanent or part time employees, then there is a thing called the sickness payment under our welfare system … that provides the same as a Newstart payment in the right circumstances could potentially support people in that situation as well,” he said.
Federal Treasurer Josh Frydenberg said the measures were designed to keep “businesses in business” and to provide stimulus to households
“[This] announcement will provide the support businesses need to stay in business and keep Australians in a job,” he said.
“By acting decisively, this package will put Australia in the strongest possible position to deal with the economic challenges we face and to make sure our economy bounces back even stronger.”
Former Treasury boss Martin Parkinson yesterday said at least $10 billion was needed to avoid a deep recession.
“If you don’t do a minimum half a per cent of GDP you risk being seen to be doing too little,” Dr Parkinson said.
Spending of that scale would put the package on par with the first phase of Kevin Rudd’s response to the global financial crisis in 2008.
In recent days the Government has been at pains to point out it backed that first phase, but opposed Labor’s $42 billion splurge that came four months later in February 2009.