Federal parliament passes stimulus package

Parliament passes second round of stimulus measures worth $66 billion.

Parliament has passed a second round of stimulus measures worth $66 billion, bringing the total economic rescue package to $189 billion.

The funding, aimed at protecting workers and small businesses, will boost income support payments, introduces targeted changes to the superannuation rules, provides cash flow support of up to $100,000 for small business employers, and relaxes corporate insolvency laws.

The Prime Minister Scott Morrison said the government was acting to cushion the blow from the coronavirus for businesses and households to help them get through to the other side of the crisis.

“We want to help businesses keep going as best they can and for as long as they can, or to pause instead of winding up their business. We want to ensure that when this crisis has passed Australian businesses can bounce back,” the Prime Minister said.

“We know this will be temporary.  That’s why all our actions are geared towards building a bridge, keeping more people in work, enhancing the safety net for those that aren’t and keeping businesses alive so they can get to the other side and stand up their workforce as quickly as possible.

“We know Australia’s more than 3 million small and medium businesses are the engine room of our economy. When they hurt, we all hurt.

“The next few months are going to be a difficult journey but we all have a role to play to adapt to the changes we’re facing, to cushion the impact of what is happening and to pull together so we can bounce back when we get to the other side.”

The government is providing up to $100,000 to eligible small and medium sized businesses, and not‑for-profits (including charities) that employ people, with a minimum payment of $20,000.

These payments will help businesses’ and not-for-profits’ cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.

Under the enhanced scheme from the first package, employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000.

In addition, the minimum payment is being increased from $2,000 to $10,000. The payment will be available from 28 April 2020. Small and medium business entities with aggregated annual turnover under $50 million and that employ workers are eligible.

The government is estimating the measure will benefit around 690,000 businesses employing around 7.8 million people, and around 30,000 not-for-profits.

The measure is estimated to cost $31.9 billion – an increase of $25.2 billion in support from the first package when the cash payment limit was $25,000 not $100,000.

The government will establish the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SMEs) to get access to working capital to help them get them through the impact of the coronavirus.

Under the scheme, the government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs. The government’s support will enhance lenders’ willingness and ability to provide credit to SMEs with the Scheme able to support $40 billion of lending to SMEs.

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 package also includes temporary relief for directors from any personal liability for trading while insolvent.  The Corporations Act 2001 will be amended to provide temporary and targeted relief for companies to deal with unforeseen events that arise as a result of the coronavirus.

The Federal Government says more packages will be announced as needed.

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