Updated: Mar 24
With the world changing overnight due to the Coronavirus pandemic. Many of your employers, clients and job seekers are going through severe financial and emotional hardships. Now is the time to reach out and see how you can help them. I am sharing this transcript and information on the latest government support package, as this can help many of your clients.
If you're not doing so already, please reach out and see how you can assist your clients in their current businesses and
job seekers with accessing these funds and incentives.
HERE IS THE LATEST STIMULUS INFORMATION AND ROUGH TRANSCRIPT
Since, the Australian government announced its first stimulus package just over a week ago, the global and the domestic economic environment has deteriorated. The government now expects the economic shock to be deeper wider and longer.
Every arm of government and industry is working to keep Australians in jobs, and businesses, and business in business and to build a bridge to recovery on the other side.
Yesterday, the government announced a second package. 66 billion dollars to cushion the blow to households as a result of the coronavirus and to support businesses.
Here is a breakdown and transcript as spoken yesterday by Josh Frydenberg Treasurer, Deputy Leader
The package has 3 parts involving 10 different initiatives.
The package will support households including casuals’ sole traders, retirees, and those on income support.
It will provide assistance for businesses to keep people in a job.
It will provide regulatory protection and financial support for businesses to stay in business.
FIRST PART OF PACKAGE – Jobseekers and Sole Traders
The government is announcing, the doubling of the job seeker allowance, formerly known as Newstart through the introduction of a temporary coronavirus supplement.
The government will also waive the Assets test and waiting periods for the job seeker allowance, allowing more Australians to more quickly access the support that they need.
The coronavirus supplement will provide an additional five hundred and fifty dollars, a fortnight on top of the existing job seeker or new start payment and will be available to sole traders and casual workers who meet the income test.
This means anyone eligible for the maximum job seeker payment, will now receive more than $1,100 a fortnight, effectively doubling the job seeker allowance.
In the first package, on the 12th of March, we announced a seven-hundred-and-fifty-dollar payment for Australians on income support. Today, we announced that from July 13, a further seven hundred and fifty dollar payment to those on income support that are not eligible for the coronavirus supplement, this includes those receiving the age pension, the carer’s allowance, family tax benefits, and the commonwealth seniors health cut. In total of 5.2 million Australians.
We are also reducing the deeming rates by a further quarter a percent to reflect the recent Reserve Bank interest rate cut.
Over 900,000 Social Security recipients on income-tested support will now benefit.
Our economic response will allow those Australians who are in financial stress as a result of the coronavirus to access more of their own money in superannuation. From April, those affected will gain access to their superannuation capped at $10,000 this financial year and a further $10,000 next financial year. These withdrawals will be tax-free and available to those who are eligible for the Coronavirus Supplement, as well as sole traders who have seen their hours work, worked or income fall by 20% or more as a result of the coronavirus. Applications will be made online through a simple declaration to the tax office.
The government is also giving retirees more flexibility over their superannuation. Currently, retirees are required to draw down a minimum of 4% a year from their superannuation. A number that increases with their age the government is having this requirement to 2% for this year and for next year. To give retirees more discretion over the management of their assets.
SECOND PART OF PACKAGE - SMEs
The second part of our package sees a massive scaling up of support for small and medium-sized businesses across the country. We are increasing cash payments to SMEs to boost their cash flow and to keep their workers employed.
All employing businesses will receive at least $20,000. All employing small businesses will receive at least $20,000 and some of the larger SMEs will receive up to $100,000 and we are extending this measure to around 30,000 not-for-profit organizations, which have an annual turnover of less than 50 million dollars. This will be a lifeline for hundreds of thousands of employers like the local hairdresser, the local café, the local mechanic, whose income has been significantly reduced over this difficult period. This payment will be automatically paid through the tax system largely over the next six months with the first payment after 28th of April. No new forms will be required from Australian small and medium-sized businesses.
Over the course of the last week, a hundred and five billion dollars is being injected into the financial system by the government and the Reserve Bank of Australia. The purpose of which was to lower the cost and increase the availability of credit particularly to smaller medium-sized businesses.
Today, the government is going one step further and is guaranteeing in a 50/50 partnership with the banks and other lenders more lending to Australia's small and medium-sized businesses. This forty-billion-dollar scheme, which will start in early April, will provide loans of up to two hundred and fifty thousand dollars for up to three years, for a business with a turnover of less than 50 million dollars. No repayments will be required for the first six months. These will be unsecured loans and they will help build a bridge for small and medium-sized businesses to the other side of the coronavirus and I urge small businesses to go and talk to their bank about these new opportunities that are available. These funds will provide hope and confidence to a vitally important sector and together with the red tape reduction for SME lending announced on Friday, more credit will be coming their way.
FIRST PART OF PACKAGE - Profitable and Viable Businesses
The third part of our package will provide a regulatory shield for what are otherwise profitable and viable businesses that find themselves under severe financial pressure as a result of the coronavirus. Now is the time for more flexibility in insolvency and bank dropsy laws to keep these businesses alive and to trade through this period.
The government is proposing to increase the threshold, at which a creditor can take action to initiate insolvency or bankruptcy from as low as $2,000 today to $20,000. And giving companies and individuals six months instead of 21 days to respond.
We will also provide relief from direct for directors from personal liability where the company is trading, while insolvent this relief will be provided over the next six months and will be vital to helping companies get through this period.
As a result of the health-related restrictions being put in place to reduce the impact of the coronavirus it will not be possible for many companies to comply with their obligations under the Corporations Act. For example, holding general meetings in person. A temporary six-month power will be provided to me as the treasurer to deal with these situations, as they arise.
These extraordinary times require extraordinary measures and we face a global challenge like we have never faced before, but by working together. We will get to the other side and we will bounce back stronger. Today's announcement will provide hope and support for millions of Australians at a time when they need it most. We know that there is more to do and we will continue to do what attacks.