The Morrison Government has today announced a $17.6 billion economic plan to keep Australians in jobs, keep businesses in business and support households and the Australian economy as the world deals with the significant challenges posed by the spread of the coronavirus.
Our targeted stimulus package is focused on keeping Australians in jobs and helping small and medium sized businesses to stay in business.
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 that will benefit the wider economy
The measures are all temporary, targeted and proportionate to the challenge we face. Our actions will ensure we respond to the immediate challenges we face and help Australia bounce back stronger on the other side, without undermining the structural integrity of the Budget.
Prime Minister Scott Morrison said as part of the plan up to 6.5 million individuals and 3.5 million businesses would be directly supported by the package.
“Just as we have acted decisively to protect the health of the Australian people, based on the best evidence and medical advice, our support package responds to the economic challenges presented by this pandemic in a timely, proportionate and targeted way,” the Prime Minister said.
“Our plan will back Australian households with a stimulus payment to boost growth, bolster domestic confidence and consumption, reduce cash flow pressures for businesses and support new investments to lift productivity.
“Australia is not immune to the global coronavirus challenge but we have already taken steps to prepare for this looming international economic crisis.
“We’ve balanced the budget and managed our economy so we can now use this to protect the health, wellbeing and livelihoods of Australians.
“Our targeted stimulus package will focus on keeping Australians in jobs and keeping businesses in business so we can bounce back strongly.
“The economy needs temporary help right now to bounce back better so the livelihoods of all Australians are protected.”
Treasurer Josh Frydenberg said Australia is approaching the economic challenge from the Coronavirus from a position of strength with IMF and the OECD both forecasting Australia to grow faster than comparable countries including the UK, Canada, Japan, Germany and France.
“Our plan keeps businesses operating, supports jobs and provides a stimulus to households,” the Treasurer said.
“The Government has worked hard over the last six and a half years to return the budget to balance so we have the flexibility to respond to the serious economic challenges posed by the Coronavirus.”
“Given Australia’s strong economic and fiscal position, the international credit rating agency Standard and Poor’s indicated that temporary stimulus would be “unlikely to strain Australia’s creditworthiness.
“In our response, we have been very careful not to repeat the mistakes of previous stimulus programs and not undermine the structural integrity of the budget.
“Today’s announcement will provide the support businesses need to stay in business and keep Australians in a job.
“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.”
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 that 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 over 3.5 million businesses (over 99 per cent of businesses) employing more than 9.7 million employees or 3 in every 4 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 that 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 9 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 that employs that apprentice.
Stimulus payments to households to support growth
- $4.8 billion to provide a one-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession card holders. Around half of those that will benefit are pensioners. The payment will be tax free and will not count as income for Social Security, Farm Household Allowance and Veteran payments. There 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 over 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 that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks. It will also include additional assistance to help businesses identify alternative export markets or supply chains. Targeted measures will also be developed to further promote domestic tourism. Further plans and measures to support recovery will be designed and delivered in partnership with the affected industries and communities.
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. The ATO will set up a temporary shop front in Cairns within the next few weeks with dedicated staff specialising in assisting small business. In addition, the ATO will consider ways to enhance its presence in other significantly affected regions to make it easier for people to apply for relief, including considering further temporary shop fronts and face-to-face options.
The Government’s economic support package is proportionate, timely and scalable to respond to the economic challenges presented by the spread of the coronavirus.
Through our response today and the actions we have taken to bring the Budget back to balance over the last six and a half years, Australians can be confident that our nation is one of the best prepared to respond to the economic impacts of the coronavirus.
PRIME MINISTER: Well good morning, everyone. Jobs. Australians in jobs. This is something our government has had, and continues to have, a vibrant passion for. More than one and a half million jobs have been created over the last six years or so since we first came to government. Our policies are designed to get people in jobs, to get young people into jobs. People as they move through the years, and they go even in the older years, getting them into jobs, as careers change and transition. Jobs provide people with choice. Jobs are just so important. And as we confront the challenges of the Coronavirus, as its impact is felt, not just here in Australia, but around the world, jobs are so important as part of our plan to ensure Australia moves through these difficult months ahead. Yesterday I was here with the Health Minister and we announced and outlined our plans to deal with the health challenges associated with dealing with the Coronavirus, some $2.4 billion, in a series of well-thought through measures dealing with everything from the needs of remote Indigenous communities, to the pop-up clinics, and the testing procedures and facilities that were available. It is a health crisis, but it's a health crisis with very significant economic impacts. We set this out very clearly two weeks ago, when as a Government, I stood here in this courtyard and said we were preparing for pandemic. Today, the World Health Organization has made that declaration. We called that two weeks ago. Back in January, we also called the Coronavirus as an issue that warranted and needed our very careful attention. And ever since that time, we have been planning, preparing and responding with the travel bans and the other actions that the Government has taken. But the fiscal stimulus that would be necessary, and is necessary, to deal with the economic challenges that the country will face in the months ahead has been an important part of our plan for Australia to move through the challenges of the Coronavirus in the months ahead. This plan is about keeping Australians in jobs. This plan is about keeping a business in business, particularly small and medium sized businesses, and this plan is about ensuring the Australian economy bounces back stronger on the other side of it, and with that, the Budget bounces back with it. Today, we're announcing a series of measures. Those measures are designed to achieve those outcomes. They are heavily focussed on understanding that it is businesses that keep people in jobs. And those businesses will confront challenges when it comes to cash flow and and demand impacts, particularly in the short term that need to be addressed by this package. I'm going to ask the Treasurer to go through the specific measures, but to say that simply that this package over the course of the Budget and the Forward Estimates will inject some $17.629 billion into the Australian economy in a series of measures which are designed to support cash flow, boost investment and provide immediate demand stimulus to the Australian economy. More specifically, both this financial year and in the next two financial years, the gross impact of that stimulus is $22.9 billion - that's 1.2 per cent of GDP. This is a significant investment. We have taken the decision to put this stimulus in place that has the obvious impact on the Budget outcome for 2019-20. And Australians understand that, Australians know that this needs to be the priority, and our Government agrees with that priority. And that's why we've taken the decision to put these measures in place. The measures deal with supercharging the instant asset right off, backing business investment with an accelerated depreciation scheme, which the Treasurer will work through. A cash flow boost for employers, this is small and medium sized employers and making sure that they can get grants for up to $25,000, and that will support some 690,000 businesses across Australia. Wage assistance for apprentices and trainees, 117,000 apprentices who are out there on the tools today will be getting the support of that payment to their employers to keep them in their apprenticeship, and that that support will run over a period of nine months. Households will receive a stimulus payment of $750 right across the full gambit of those who receive all sorts of benefit payments. The biggest beneficiaries of that will be pensioners, and 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. And there will be a coronavirus regional and community fund. There are businesses across this country that will be more impacted than most and there will be regions and communities across this country that will be more impacted than others. Those in particular are in more remote areas. Those who are particularly exposed when it comes to the external sector of our economy; the tourism sector, the travel sector, parts of our export sector, in cray fishing, in places where that is a predominant activity and there is a significant exposure. We’ll be establishing a one billion fund, which will be led by the Minister for Trade, Tourism and Investment, Minister Birmingham. And that will include things like waiving marine park fees and national park fees at Kakadu and other places. But these will be targeted measures and I'll be looking forward to discussing that fund with the Premiers and Chief Ministers when we meet together tomorrow. Everyone has a role to play here, to get us through this. I particularly want to acknowledge the way big business have responded over the course of this week.
You've heard me referred to what Qantas has done and what the banks did to pass through the rate cut. Yesterday, I was advised that Telstra are also going to be supporting their casual employees, should they be in a position where they're affected by Coronavirus or self-isolation. I also want to provide this assurance to Australians, already under our welfare system, a casual employee who would be impacted by the coronavirus and for medical reasons, who would need to self-isolate or indeed contracted the coronavirus, and would not be able to work, they can access what is currently called the Sickness Payment. That payment is going through a change of name, but it's the same payment. And what we'll be doing is waiving the waiting period for people to access that, what is currently called the Sickness Payment, will be called the Jobseeker Payment, but it is a Newstart level payment. And people who are casual employees that wouldn't be able to go to work or because they have to self isolate or indeed have the virus, they would be able to access that payment. The normal assets test rules apply to those as they do to these payments, but the waiting period will be waived to enable them to access that payment. And that will provide that support. Many other countries don't have that in their system. I note that the UK has made some announcements on that. We already have a system that deals with that and we're going to make sure that that payment is more readily able to be supported. The Treasurer and I have also indicated today that there's been changes to the deeming rates, that is not technically part of the stimulus package, that is a response to the early decision by the Reserve Bank. But that will also, I think, come at a welcome time for the arrangements we've put in place to date. So it is a comprehensive package. It's one that we, we believe, is well-targeted. Importantly, these measures do not extend beyond the 30th of June next year. And that means that gives the the Budget and the economy the opportunity on the other side to ensure that we can bounce back strongly. How long the virus runs for, well that is a matter that is still, scientists and health professionals are advising us on. But it does have a finite life. There is another side to going through this issue, and it will be stronger on the other side, and the global economy will recover on the other side. And the Treasurer and I, and the Government, want to be in the best possible position for our businesses, holding onto their employees, ensuring they're continuing to train up, ensuring that they are maintaining their investment plans, because on the other side, they're going to do well. And we're going do everything we can to ensure their best positioned to bounce back strongly on the other side. Thanks, Josh.
THE HON. JOSH FRYDENBERG MP, TREASURER: Well thank you, Prime Minister. This is a substantial package in response to a significant economic challenge. The package is designed to support confidence, to encourage investment and to keep Australians in a job. The package is worth $17.6 billion, $11 billion of which will go out the door before June 30th. And as the Prime Minister said, this is on top of the recent health package, which we announced of $2.4 billion in measures.
Importantly, $3 out of every $4 spent will go to backing business and keeping Australians in a job. $3 out of $4 being spent is going to backing business and keeping Australians in jobs. There are six key measures. Each measure is temporary. Each measure is targeted. And each measure is proportionate to the challenge that we face. There are two measures that are directly supporting investment. Both measures apply from today and to 99 per cent of Australian businesses, namely those with a turnover of up to $500 million. The first is an increase in the instant asset write off from $30,000 to $150,000. Any such purchase from now until the 30th of June, including a truck, a tractor, a shop fitout, can be written off immediately.
The second is a 50 per cent accelerated depreciation deduction over and above what businesses can already deduct in the first year and is available for 15 months to the 30th of June 2021. These two measures cost $3.9 billion over the Forward Estimates and are designed to keep Australian businesses investing, as well as rewarding them for investing more. We want to keep Australian businesses investing and we want to reward Australian businesses for investing even more. There are two measures that are designed to boost cash flow to small and medium sized employers. The first is a payment of up to $25,000 to businesses that employ people and have a turnover of up to $50 million. The payment will be delivered automatically through the tax system, so no new forms will be required. And these payments are tax free, so they'll be delivered automatically, and these payments are tax free. The second is a 50 percent wage subsidy for apprentices and trainees in businesses with less than 20 employees. Employers will receive up to $21,00 per apprentices and 117,000 apprentices will have additional job security as a consequence of this measure. These two measures, which cost around $8 billion, are designed to keep businesses in business and Australians in a job. The Government will also deliver a one-off stimulus payment to households with six and a half million Australians receiving a payment of $750. This includes recipients on Newstart, the Disability Support Pension, Carers Allowance, Youth Allowance, Veterans Support Payments, Family Tax benefits, the Commonwealth Senior Health Card Holders, and 2.4 million aged pensioners. This one-off payment, which cost $4.8 billion will flow automatically from the 31st of March and provide additional income to millions of Australians that will be spent across the economy. A new regional and community support fund is also being established with an initial allocation of $1 billion. And this will be designed to target those areas and provide assistance that are most heavily affected by the spread of the Coronavirus. This will include the waiver of certain fees and charges for tourism businesses operating in Commonwealth National Parks and the Great Barrier Reef Marine Park, increasing domestic tourism promotion and additional assistance through Austrade to help identify alternative export markets and address supply chain breakdowns. As occurred with the bushfires, the ATO will also be providing relief for those significantly affected with the deferral of various tax obligations by up to four months. In addition, as the Prime Minister foreshadowed, in addition to the stimulus package, the Government is lowering the deeming rates at a cost of $600 million to reflect the recent changes in interest rates. Both the lower and the upper deeming rates will be reduced by half a percentage point, benefiting around 900,000 Australians, including 560,000 age pensioners.
These are challenging times, but the Australian people and the Australian economy are up to this challenge. Our economy has continued to grow and our economy remains resilient. The genesis of this economic shock was outside of our control, but our response is not. And our disciplined and careful budget and economic management over the last six and a half years has put us in a position that we now have the fiscal flexibility, we now have the financial firepower, to respond to this economic shock. This package of measures is both substantial and considered, and it stays ahead, it assures Australia stays ahead of this global challenge as it does continue to unfold.
PRIME MINISTER: Thank you, Josh. Kieran.
JOURNALIST: Will this package be enough to save the nation from recession?
PRIME MINISTER: We have worked carefully Kieran, to make sure that we have got a proportionate response here to meet the challenge. Now, this is, as I said 1.2 per cent of GDP. To give you some comparison, when the initial stimulus was done for the GFC many years ago, those payments equated to some 0.88 per cent of GDP in that first package, which, as you know, was supported by the Coalition. And that used quite similar measures in that first stimulus. It was payments through the payment system. That was 0.88 per cent of GDP. The difference with this package is A. about $3 out of $4 of what's going into this is, is actually going into business cash flow. It's going into keeping people in work. It's going into ensuring that investment continues to be made in the economy with purchasing of new equipment, and the wheels of the economy turning. This is, I think, a key difference, is that we understand that for the Australian economy to continue to move forward, businesses need to continue to go forward and do what they do each day. But that also requires the support of a demand stimulus as well that is effectively and very efficiently delivered. And that's what the $4.6 billion payment is doing, sorry $4.7 billion payment is doing. And it's going through to those people, which we know from past experience, are most likely to churn that into the economy quite quickly.
So as Josh said, we can't control the source of this problem, being the Coronavirus, which has come from elsewhere, but we can control our response. This response, as I've said as a key principle, is also scalable. The Budget will be in two months time. We believe these measures are the measures that can do the job and we will continue to monitor events as we go forward. But we've, we got ahead of this early. We've worked very hard to stay ahead and that challenge grows each and every day. And I think Australians are really starting to come to terms of what the economic implications of this are. I believe very strongly that they will support our decision to actually make this stimulus the priority at this time for the Australian economy, because it's about their jobs, their livelihoods, and it's also about their future, because on the other side of this, we will bounce back stronger. Mark.
JOURNALIST: Prime Minister, the Budget now is obviously back in the red. What's your promise on a surplus? When will Australia see one?
PRIME MINISTER: Well, we’ll update the Budget when it's handed down in a couple of months time - But hang on. Can I answer Mark's question? The Budget is obviously updated in May, Mark. And what we need to look carefully at over the next few years is how the broader global impacts will impact on the Australian economy out over the next three or four years. But importantly these measures are designed to ensure that at the end of this next financial year, then there is actually a positive impact that comes from the bring forward of expenditure on accelerated depreciation. So we have positive impacts on the Budget in 2022-23 of $1.6 billion based on this and $3.7 (billion) in 2023-24. The way we have designed this stimulus is to ensure that it doesn't have a fiscal hangover down the track, that it doesn't bury the Budget for a decade. This is all designed to put the stimulus in now, in a very efficient and effective way to deal with the problems that are here and now, and I've got to say, problems that we know to be the issue here in Australia. We're not looking to cut and paste from people's problems in other economies. This is based on our diagnosis of what is happening in the Australian economy and the best way to deal with it. Lanai.
JOURNALIST: Prime Minister given the level of panic around coronavirus, how can you ensure that people will actually spend their $750, rather than just banking it?
PRIME MINISTER: I believe their common sense is if they’ve demonstrated in the wake and in response to previous situations like this sort of speaks for itself. I mean, the advice that we have on this has been proven by these experiences in the past. I think what's important is Australians go about their business, is that they know and they can see through what we've announced today, that this is a very comprehensive, a very well thought through, a well-targeted plan, which is designed to support the Australian economy and jobs and businesses through the difficult months ahead. And in addition, the health plan that we've announced, and the support we're providing to the states, so people can go about their lives in response to the Coronavirus, can give them that confidence. This is a very clear plan to see us through. And the plan is based on Australians also working together. We all have a role to play, whether it's the Commonwealth Government. I'm looking forward to discussing these measures with the states tomorrow and looking forward to their responses as to what they would do in addition to this. With this information, they can now add to this with their own plans. But the health side of this is also critically important. The health plan, working together with the economic plan, I think can give Australians the confidence they're seeking. Phil.
JOURNALIST: The payments to the welfare top-ups are going out at the start of the June quarter. Is that a recognition that the March quarter is cooked or that the June quarter is what the focus is on now? And could you just explain how the $17.6 billion becomes 20 -
PRIME MINISTER: Yeah, sure.
JOURNALIST: ...I think 22, or whatever it was over ...?
PRIME MINISTER: Well and Josh you could do that as well, I mean, but it's $22.9 billion for 19-20, 20-21 and 21-22. Now, that includes some $9.2 billion in fiscal impacts of the instant asset write off and the backing business investment measures. And when you bring forward investment, if you're writing that off, investment, a lot quicker, then obviously you can't be making depreciation deductions for the same investment 3 years from now. And so we're bringing forward the benefit of those depreciation, those tax measures to businesses now, that means down the track when the economy is improving, then we can expect to see some improvement. And that's the difference between the two. It's the timing issue of the impact of the depreciation and the instant asset write off measures. But Josh did you want to have a go?
TREASURER: Well, Prime Minister, I mean, the money will start to flow to these households from the 31st of March, $750 going to 6.5 million Australians, Australians who are on Newstart, Australians who are on the carer's allowance, Australians who are getting family tax benefit. These-
PRIME MINISTER: Commonwealth Seniors Health Card.
TREASURER: Commonwealth Senior Health Card holders. 6.5 million Australians will be getting a check for $750. Now, it's not for us to tell those Australians how to spend their money, 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, because in the June quarter, just as we've seen in the March quarter, the spread of the Coronavirus has had an impact, has had an impact across the economy. It's disrupted, end to end supply chains. It's obviously had an impact on the tourism sector, on the international education sector and more broadly.
PRIME MINISTER: The cash payments, the cash payments have two purposes. And they're both important. Of course, those who receive it, that is obviously a benefit to them. But but more importantly, frankly, it is about a cash injection into the Australian economy, which supports small businesses and supports medium businesses. So the cash payment works together with the cash flow support that we're putting in to small businesses. And that in turn supports the jobs, which means people can continue to participate positively in the economy and have greater confidence going forward. Katherine?
JOURNALIST: Prime Minister can you explain a little more about how this fund for tourism and other businesses work, do people have to apply for it? Are there particular criteria around what people can apply for it or not? I just don't understand how it works?
PRIME MINISTER: This fund is one that we will have to work through with the states and territories. I'm not saying that means it's a dollar for dollar fund, I'm, what I'm saying is that there's a lot of work being done at the moment to identify those areas which are most critically impacted. And look, and this is an unfolding story day by day. We're obviously concerned about the impact in places like north Queensland, for example, and that's why we've made the decisions on things like the marine park fees and things of that nature. What we envisage is that the same type of assistance that you've seen provided in the most affected bushfire areas. And there is a range of grants and other payments that have been paid into those environments. In those circumstances, then we would look at how those same types of grants and supports could be provided in to designated areas that are more affected as a result of this Coronavirus. Now, on top of that, as the Treasurer has said, there's things like domestic tourism promotion and things of that nature. And so far, at least in relation to the bushfires, we've seen some positive results from that investment we did out of the National Bushfire Recovery Fund. So it is applying a similar type of process that you would see in a disaster recovery arrangement, being applied in specific areas that are particularly affected, but that has to be properly defined. I want to work closely with the states and territories on that because there are measures that I'm sure they would be looking at in their more affected areas. It's creating a fund to draw those initiatives out of and for them to find, particularly working in close consultation with those sectors themself. I mean, Geraldton, that's where that's where the crayfish are exported to Chinese restaurants in China. They've obviously had a big impact on on that town and on that sector. Now, Austrade has already been working with them to try and diversify their markets, to get their product into other places. But they're also impacted by the fact that there are fewer planes going between Australia and China and you need the bellies of the planes to put the crayfish in. So that means that we're going to need quite targeted plans working closely with people on the ground. And this billion dollar fund is creating the resource to fund those initiatives. It works different to the others. It has less of an immediate stimulatory impact. And that's why it is talked about as a community fund. It's about relief, but it is also about recovery.
JOURNALIST: Treasurer, the Reserve Bank Governor, had an urgent meeting with central bankers from around the world into the early hours of this morning, do your concerns around the ineffectiveness of lower interest rates bear much on the size of the stimulus that you're announcing today?
TREASURER: Well, I think one important aspect of all of this is the alignment between monetary and fiscal policy. And that's really important because as the Prime Minister said, this is a $17.6 billion package, the bulk of which is going out the door before June 30. And we did welcome the fact that the interest rates were passed on by the banks. I've spoken to Phil Lowe actually today and he continues to watch very closely what's happening with debt yields. What's happening with bond yields, what's happening with credit spreads, what's happening with liquidity in global markets. He's made some comments about that. And obviously, monetary policy is the is the remit of the independent Reserve Bank of Australia. But I think it's important to understand that this is very different to the GFC in a number of respects. This is not a financial system problem. This is not a liquidity crisis. This is a health crisis. But one of the other differences is that with the GFC, there was a lot more room with monetary policy to respond, this time monetary policy globally is pretty much exhausted, and we did see the Bank of England substantially reduce their rates down to I think a quarter of a per cent overnight. So it's a different situation. But there is an alignment between this government and the Reserve Bank about getting money out the door to support jobs and growth.
PRIME MINISTER: David.
JOURNALIST: Prime Minister, you said you believe this will do the job. Is the job to avoid a recession? And is the advice of Treasury that this is enough to avoid a recession?
PRIME MINISTER: The job is what I outlined when I stood here with the Treasurer just 10 minutes ago, and that is to ensure that we keep Australians in jobs, that we keep businesses in business, and that we ensure the Australian economy is a position to bounce back strongly on the other side. That is the task. That's what we've designed this package to do. If more is required, more will be done. And we'll watch that closely like you do with any plan and you get the best information and you continue to make good decisions. I think we've made some very good decisions here. And this boost, as I said, 1.2 per cent of GDP, particularly in the initial phase. And even stronger than that actually this year as you look at, it was about $11 billion going out the door effectively by the 30th of June. That's when it's needed. This is very front end loaded. It's done that, we've done that on purpose because, you know, we anticipate that particularly over the next three months or so, then that's when we're really going to see the most significant impacts of the Coronavirus. Now, the medical advice may extend that, and and we will address that in due course. But take the apprentice's measure, for example, the apprentice's measure that is going to support people who are an apprentice on the 1st of March and they will get a backdated payment from having that apprentice in in in work from the 1st of January. And that will run out over a nine month period, which takes us to the end of September. Now that's a pretty significant period of time. And I think if you're a young apprentice at work today, I think you're gonna feel a lot better about that. And if one of them is one of your kids, you're going to feel a lot better about that. I've got a nephew who works as an apprentice for a plumber down in the Shire. And, you know, Warren or Wazza as he’s known, he he has a small business. It's a plumbing business. And I think it's great that small businesses take on apprentices. And at a time like this, the best way for me and the government to thank those small and medium sized businesses for those decisions is to back their decision to back these apprentices.
JOURNALIST: Is Treasury telling you they reckon this will stop the recession?
TREASURER: Well what, David, we've done throughout this process and the Prime Minister has been very focussed on having a considered response, not rushing out a response. We've been working on this for a couple of weeks. And in that process, we've been working very closely with Treasury and taking their their best advice. Their preliminary estimate is that this $11 billion dollars of injection of funds through to June 30 could add up to 1.5 per cent to growth to GDP, to GDP in that June- in that June quarter. But of course, the unknown is how does the virus evolve from here? And you heard from the Deputy Governor of the RBA just yesterday, I think, to to the to the conference at the AFR, he said it's too early to be definitive about what the impact is on the June quarter from the evolving impact of the virus. Now, that's also Treasury's view. But what we have done here is to put a significant amount of money into the economy, to support businesses, to support jobs and to support people with those cash payments.
PRIME MINISTER: Sarah.
JOURNALIST: Can I just clarify, when you say more is required, the Government is prepared to spend as much as necessary to avoid Australia falling into recession?
PRIME MINISTER: The government will always engage in responsible financial and economic management. And if we believe that what is in the interest of the Australian economy, which is why we're investing 1.2 per cent of GDP in this package over the next couple of years, then they’re the actions that will take but we will always be measured about it. This package wasn't sort of cobbled together over a weekend in response to events, two weeks ago I said that we would need to have a fiscal package and we've carefully gone about the work and it has been an exhaustive process over the last couple of weeks. And there are plenty of ideas as to how you might do this. And, but you've got to test them all, and you, and the tests that we set for this package were very strong. And one of the most important was, not coming up with, you know, fancy new schemes that would have to be set up with application forms and there'd be integrity issues and they had the potential to spin off into all sorts of directions. That would have been a very careless action and a reckless action. We knew that the package would need to have a significant volume to it. As you've, you can see here in what we've announced today, but it also needed to be carefully targeted and designed and we've taken the time to get that right and we will continue to monitor this situation every day. And the Budget, as I said, is in two months time and we'll continue to to be working on these issues and we'll continue to take the responses in the best interests of Australian jobs. I've got to share it around a bit Kieran,
JOURNALIST: Can you explain how the cash flow payments to businesses that employ workers. How will that help the 1.5 million sole traders, small businesses that don't employ anyone?
PRIME MINISTER: Well, we're focussed on businesses that actually employ people. We're not making, we're not making any sort of bones about that. We're supporting some 690,000 businesses that employ Australians. And because, as I said, it's about keeping Australians in work. That's what it's about. It, and what the $4.7 billion dollars of demand stimulus that's going into the economy is going to be supporting sole trader businesses. That's what it's there for. It's designed to actually improve the cash flow that is going in the economy and that, of course, supports those sorts of businesses. On top of that, the instant asset write off is equally applied to those sole traders as well. In addition to that, though, so is the 50 per cent write off rates that we've put in place for all those businesses, but the cash flow boost we're targeting towards businesses that employ people because our goal is to keep people in work. Shane.
JOURNALIST: On the instant asset right off, you've both mentioned that there's a supply shock to the economy. How will a business get capital equipment out of China, South Korea, Japan, which is almost all where our capital equipment comes from? Is there a problem there that you might run into that the businesses themselves may not be able to get the capital in to take advantage of the..?
TREASURER: So working through this with Treasury, obviously there are inventories that are in existence. And so this will, car dealers will have cars to be sold today and people will go out and buy them now and write them off directly. The other bit of good news is that we're hearing from particularly Australian businesses who have got a presence in China that people are starting to get back to work, now that's more so outside of Wuhan, of course but you know, talking to some Australian business-
PRIME MINISTER: And including in Wuhan for some businesses.
TREASURER: Yeah, exactly. But talking to some Australian businesses with thousands of employees in China, are talking about having 95 to 97 per cent of their workers now back into the factories and supply chains starting to pick up. So I don't want to understate the significance of the disruption to supply chains, but I also want to point out that there are some positive signs that are coming out now out of China, as people get back to work.
PRIME MINISTER: On the instant asset write off too I’d note this, I mean, of the many things that have happened over the last few months, which have been, you know, very hard for Australians. One of the things that has been a bright spot in the last couple of weeks has been what we've seen with rainfall in the areas that have needed it to and the fact that people are going to be putting in winter crops, there’s a lot of activity that goes around putting in a winter crop and you've had drought affected farmers, that just wouldn't have been a position to take on I think some of those investments, they're now looking forward and they're now looking forward at that activity. And I'm looking forward to seeing some of this, really supporting those drought affected communities that finally have a have a bright spot on the horizon and now this comes where they can write up $150,000 per item and get it done as they're seeking to get these crops in. And that's that's contractors coming and working with them, this is this is a welcome, a welcome development and for people, frankly, who've been doing it so incredibly hard, it's just so pleasing. They sent me a picture from Quilpie up at the Tully's property where I was at, you’ll all remember, it was a dust bowl when I was there and it is now green, and they promised me it would be green again. And so to all of those out in rural and regional communities which are looking out on a very different landscape today. We are so pleased for you. Yeah John.
JOURNALIST: Prime Minister, the Treasurer's just said that this package in the June quarter alone, Treasury expects, will add about 1.5 per cent of GDP to the economy. So by admission, that must be about the approximate estimate that Treasury must think that is going to be detracted from growth from the Coronavirus?
TREASURER: Well, John, it's very -
PRIME MINISTER: That’s quite a leap John. Nice try though.
TREASURER: It's unclear, to be honest. It's unclear what the full impact will be in in the June quarter from the spread of the Coronavirus. This thing is developing you know, quite quickly, obviously. And so this is obviously a very substantial package. And if you look at $11 billion dollars, that's equivalent to just over 2 per cent of of GDP in that quarter.
JOURNALIST: Prime Minister, just on casuals. Are you confident that Centrelink is actually going to be able to handle all of those requests if people do get sick? And what is the timeframe once people have to go into quarantine or stay home from work, what's the timeframe they're actually going get that money from Centrelink on those sickness payments?
PRIME MINISTER: Well, what we're doing is we're waiving the waiting period. There's the normal processing timeframe, which the Minister for Government Services tells me is about five days in terms of the processing time and that would apply for someone going on to Newstart or anything like this.
PRIME MINISTER: Well, I'm saying it's about a 5 day period for processing in order, you put your application in, and then it takes about five days, I'm told, by the Minister for Government Services. Now, previously there was a waiting period that you would have to wait out and then make that application. We'll be waiving that waiting period and that will be applied to waiving that for Newstart as well, by the way, for those who find themselves in a position of having to access Newstart. But this is a good element of our system. I mean, there are many other countries in the world that don't have this, and I can understand the concern that casual employees would have had. I'm encouraged by the early response from large businesses, and I would hope other large businesses will follow the lead of Telstra, and I suspect they will from some of the some of the messages that I've had. But the government will be doing its bit by supporting that program and waiving the waiting periods to provide that support at the Newstart rate. Just behind you, Michelle, and then we'll come to you.
JOURNALIST: South Australia has already announced $350 million dollars as a stimulus package. Do you expect this level of investment from all of the states, and it's based on a construction agenda so is this the kind of projects you hope all the states will invest in?
PRIME MINISTER: Well, I'm not surprised at the leadership of Steven Marshall and the South Australian government, he's always been on the front foot on these issues. And and I commend him for that. And I have no doubt that when the Premiers and Chief Ministers gather tonight, as we do for our traditional dinner before the COAG meeting, this will be the topic of conversation. I spoke to all the Premiers and Chief Ministers last weekend as we were preparing these, these packages. And nothing in here is being done on a dollar for dollar basis. What we're doing here, fully funded by the Commonwealth, fully administered by the Commonwealth. This is us doing the heavy lifting when it comes to addressing the the the the real tough months ahead when it comes for the Australian economy and businesses. But I would expect that state governments would be looking at what they can do to complement that, and I think that's what businesses and and their own citizens in their states would be expecting them to do, so a big shout out to Steve Marshall for the message- for the measures he's already taken. I'd also note that in Queensland was it about a week ago, they announced they would have a payroll tax deferral. That's not a payroll tax relief, by the way. You just still got to to pay the money, and what we've done with our measure, which effectively is like a payroll tax type of relief, is to provide them with an actual grant. And so that's tax they won't have to pay. And where we can give greater support to small and medium sized businesses than that does two things, it keeps people in jobs and it keeps businesses in business. And I'll be looking forward to working with the states. This is this is a time to work together. Michelle?
JOURNALIST: One of the features of this crisis, distinctive features, is that a whole lot of activities and events are going to be cancelled for health reasons and we're starting to see that. Do you have any forecasts of how extensive the effect of that could be? And do you have any advice to those looking to whether events should go ahead or should not go ahead?
PRIME MINISTER: Well, it's very simple. You follow the health advice. I'm going to the footy this weekend and I'm looking forward to it. And I'm sure many Australians would. And I encourage you to, unless you're ill and unless there's reason that with your own, if you're in self isolation for medical reasons or you're actually ill, that I wouldn't suggest you go. But the health advice is not for that to happen at this point.
PRIME MINISTER: Well, the organisers should take the health advice both from their state health officers and that is available and certainly at a Commonwealth level. Then Dr Murphy has been providing advice on those issues and there have been no suggestions from those body of health advisers for that to occur at this point. Now, we can't know the future and at, if at some point in the future the health advice were to change then I'm sure they'd give that advice. But right now, I would continue to say I think there's 120 odd people who have contracted the Coronavirus in Australia. About a fifth of those have already cleared the virus and almost half are close to clearing the virus. Those numbers are low compared to what we're seeing in other countries. But that's not to say it'll stay that way. But as Dr Murphy has said on numerous occasions, for most Australians who might contract Coronavirus, then they are likely to have a mild effect from that virus. Those who are more at risk, of course are the elderly, particularly those who are in aged care facilities and potentially those in remote indigenous communities. And that's why we put in place the health measures that I announced yesterday. But I think, Michelle, it's it's helpful not to speculate until things are known. And at this point, the health advice is not ad vising that. But obviously down the track, depending on how events unfold, then that advice might prove to event organisers having different plans.
JOURNALIST: When you declared the Government, when you declared the budget was back in black, do you believe maybe you were counting your chickens before they hatched?
PRIME MINISTER: Well, which of you understood the Coronavirus was going to occur when we handed down the Budget last year? A quick show of heads, of course of course, no one did.
JOURNALIST: [inaudible] Labor after GFC?
PRIME MINISTER: Well, let's be clear about what happened with Labor's 4 ‘surpluses we announced tonight’. That was in 2012. The GFC had passed, Labor promised 4 surpluses based on an iron ore price of US $180 a tonne, forever. They didn't achieve a surplus because their forecasting and their estimates and the construction of their Budget was flawed. What is occurring here is the government has made a clear choice, having brought the Budget back to balance, which was demonstrated in the mid-year statement, and the mid-year statement showed even with more conservative forecasts that we were on track. We were right on track. And the coronavirus has had the obvious impact and it has required the decision the Government has taken to put in place this significant economic stimulus. And I believe Australians agree with those priorities. We will always do what is right for the Australian economy. What is always right for the Australian people, their health, their wellbeing, their livelihoods. And to ensure that whatever we face as a country, we will always bounce back stronger.
Thank you all very much.