Daily Bulletin


News

  • Written by Michelle Grattan, Professorial Fellow, University of Canberra
The Conversation

A payment of $750 will be made from the end of this month to about 6.5 million people as part of the government’s $17.6 billion stimulus package aimed at keeping Australia out of a recession caused by the impact of the coronavirus.

The one-off tax free payment will go to pensioners and others who receive income support, including those who get the family tax benefit - with pensioners numbering about half the beneficiaries.

The payment will cost $4.8 billion, and go out from March 31. Almost all payments are expected to be made by the middle of April, in an attempt to boost spending for the vital June quarter, which will be hit hard by the fallout from the virus.

Putting cash in the hands of lower income earners is considered the fastest way to stimulate the economy, because they are most likely to spend it – although the health scare makes it trickier to predict how much people could save.

The wide-ranging package is skewed to helping small and medium sized businesses, with the government’s priority being to keep people in jobs. Three out of four dollars will be spent on initiatives to assist business.

These include payments of up to $25,000 for small and medium-sized enterprises (costing $6.7 billion), wage subsidies to support apprentices ($1.3 billion), a widening of the instant asset write off ($700 million), and the acceleration of depreciation deductions ($3.2 billion).

Read more: Big stimulus package to splash cash, including $25,000 to small and medium-sized businesses

A $1 billion fund will be directed to help for severely-affected regions and communities. This will include measures such as the waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks. There will also be assistance for businesses to identify alternative export markets and supply chains.

To help people who need to access government sickness payments or are thrown out of work and require unemployment benefits, waiting times will be waived.

Scott Morrison highlighted the availability of the existing Commonwealth sickness payment, saying a casual employee who for medical reasons had to self-isolate, or who contracted the virus, and was unable to work, could access it.

Notably, the package does not contain anything for the tertiary education sector, despite it being severely affected by the travel ban on non-Australians from China, which sees tens of thousands of students stranded offshore. The government believes the universities generally have strong enough balance sheets to meet the situation.

The package will amount to 1.2% of GDP. Treasurer Josh Frydenberg said Treasury estimated the measures will add 1.5% to growth in the June quarter. Some $11 billion will go out before the end of June. The duration of measures is limited.

Read more: The coronavirus stimulus program is Labor's in disguise, as it should be

But Treasury has not yet been able to estimate the likely impact of the virus in the June quarter so, with the March quarter expected to be negative, it is unknown whether the economy will experience two quarters of negative growth, which would put it into recession.

The government now acknowledges the budget will be in deficit for this financial year. Finance Minister Mathias Cormann was blunt. “When you deliver a stimulus package of this size, I think people can add up the numbers. They can add up what it means in terms of the budget surplus. … This is not going to be a surplus year in 2019-20,” he told the ABC.

The package comes as the World Health Organisation declared the coronavirus a pandemic - something the Australian government had anticipated a fortnight ago - and the United States banned travellers arriving from Europe for the next 30 days.

Scott Morrison said the measures were “designed to support cash flow, boost investment and provide immediate demand stimulus to the Australian economy”.

The package has marked similarities to the Rudd government’s $10 billion first tranche stimulus in the global financial crisis, notably with its “cash splash” elements, although it is more targeted to business.

The prime minister will make an “address to the nation” at 7pm on Thursday.

The Australian Industry Group said the stimulus measures “will reduce the risk of a more severe downturn and the much worse budget outcome that it would bring”.

Authors: Michelle Grattan, Professorial Fellow, University of Canberra

Read more https://theconversation.com/cash-handout-of-750-for-6-5-million-pensioners-and-others-receiving-government-payments-133512

Writers Wanted

Five ways Australians can save the planet without lifting a finger (well, almost!)

arrow_forward

Ray Hadley's interview with Scott Morrison

arrow_forward

The Conversation
INTERWEBS DIGITAL AGENCY

Politics

Ray Hadley's interview with Scott Morrison

RAY HADLEY: Prime Minister, good morning.    PRIME MINISTER: G’day Ray.   HADLEY: I was just referring to this story from the Courier Mail, which you’ve probably caught up with today about t...

Ray Hadley & Scott Morrison - avatar Ray Hadley & Scott Morrison

Prime Minister's Remarks to Joint Party Room

PRIME MINISTER: Well, it is great to be back in the party room, the joint party room. It’s great to have everybody back here. It’s great to officially welcome Garth who joins us. Welcome, Garth...

Scott Morrison - avatar Scott Morrison

Prime Minister Interview with Ben Fordham, 2GB

BEN FORDHAM: Scott Morrison, good morning to you.    PRIME MINISTER: Good morning, Ben. How are you?    FORDHAM: Good. How many days have you got to go?   PRIME MINISTER: I've got another we...

Scott Morrison - avatar Scott Morrison

Business News

7 foolproof tips for bidding successfully at a property auction

Auctions can be beneficial for prospective buyers, as they are transparent and fair. If you reach the limit you are willing to pay, you can simply walk away. Another benefit of an auction is tha...

Dominique Grubisa - avatar Dominique Grubisa

Getting Ready to Code? These Popular and Easy Programming Languages Can Get You Started

According to HOLP (History Encyclopedia of Programing Languages), there are more than 8,000 programming languages, some dating as far back as the 18th century. Although there might be as many pr...

News Co - avatar News Co

Avoid These Mistakes When Changing up Your Executive Career

Switching up industries is a valid move at any stage in your career, even if you’re an executive. Doing so at this stage can be a lot more intimidating, however, and it can be quite difficult know...

News Co - avatar News Co



News Co Media Group

Content & Technology Connecting Global Audiences

More Information - Less Opinion