This blog is part of a series relating to the economic and social impacts of the COVID-19, novel coronavirus outbreak of 2020.
Following the announcement of a $2.4 billion dollar ‘Coronavirus Health Support Package’ detailed in a previous blog the federal government has today announced a further package of measures totalling $17.6 billion dollars. The measures are designed to provide economic stimulus and cash flow support for eligible individuals and businesses. Reporting on the package describes support designed to target identified groups in the following ways:
- Welfare recipients: will receive an extra $750 per person
- Small businesses with apprentices: will be provided up to $21,000 to keep paying apprentices wages
- Small to medium-sized businesses: will receive between $2,000 and $25,000 to support cashflow
- Businesses generally (excluding the very largest): will be able to utilise the increased instant asset write-off threshold of $150,000 as well as extra depreciation discount to encourage investment
- Affected businesses: can access a new $1 billion support fund
These measures are intended to keep money moving through the economy. Treasurer Josh Frydenberg said of the $17.6 dollars pledged, $11 billion would be paid by the end of June. In terms of the components of the package, the payments to business are estimated to be worth around $8 billion. The changes to write-off and depreciation rates for businesses will make up an estimated $4 billion and those payments being provided to recipients of welfare will total $5 billion.
These announcements echo the stimulus package that the Rudd government made in the wake of the 2008 global financial crisis (GFC), with Prime Minister Scott Morrison saying earlier this week that the economic impacts of this coronavirus pandemic could be worse than those of the GFC. In that instance, the Rudd government initiated a $10 billion stimulus package, followed by another $42 billion dollars worth of stimulus funding. The effectiveness of the latest stimulus package will be difficult to determine for some time as the economic impacts become clearer. The government may continue to provide further information on stimulus measures as the situation continues to unfold.