Rostron Carlyle Rojas is committed to keeping you up to date on the Coronavirus pandemic.
Last night, the Federal Parliament passed a series of bills to approve Coronavirus economic stimulus measures, without objection. These are:
• Coronavirus Economic Response Package Omnibus Bill 2020;
• Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Bill 2020;
• Guarantee of Lending to Small and Medium Enterprises (Coronavirus Economic Response Package) Bill 2020;
• Australian Business Growth Fund (Coronavirus Economic Response Package) Bill 2020;
• Assistance for Severely Affected Regions (Special Appropriation) (Coronavirus Economic Response Package) Bill 2020;
• Structured Finance Support (Coronavirus Economic Response Package) Bill 2020;
• Appropriation (Coronavirus Economic Response Package) Bill (No 1) 2019-2020;
• Appropriation (Coronavirus Economic Response Package) Bill (No 2) 2019-2020;
• Supply Bill (No. 1) 2020-2021;
• Supply Bill (No. 2) 2020-2021; and
• Supply (Parliamentary Departments) Bill (No. 1) 2020-2021.
The Bills cover two Coronavirus stimulus packages announced by the Government, totalling almost $84 billion. It has been announced that the first direct payments will be made on 27 April 2020.
The Bills are yet to meet Royal Assent, this should happen in the coming days. We will keep you updated as the details of this are announced.
Coronavirus Economic Response Package Omnibus Bill 2020
Arguably the most important, this Bill implements many economic measures, including:
• Increasing the instant asset write-off: The instant asset write-off threshold to be increased from $30,000 to $150,000 and will be available to businesses with aggregated annual turnover of under $500 million (previously $50 million). This applies from 12 March 2020 until 30 June 2020.
• Backing business investment: Until 30 June 2021, depreciation deductions to be accelerated, enabling businesses with aggregated annual turnover of under $500 million to deduct 50% of the cost of eligible assets on installation. Existing depreciation rules will continue to apply to the balance of the cost of the asset.
• Stimulus payments to households to support growth: A tax-free payment of $750 will be paid to around 6.6 million lower income Australians, including eligible concession card holders (such as those on Newstart, commonwealth seniors health card holders, and families receiving family tax benefits), and Social Security, Veteran, Farm Household Allowance and other income support recipients. A further tax-free payment of $750 will automatically be made from 13 July 2020 to eligible recipients.
• Supporting apprentices and trainees: Eligible employers can apply for a 50% subsidy of apprentices and trainee’s wages for up to 9 months between 1 January 2020 and 30 September 2020. $1.3 billion will be designated to assist this measure.
• Supporting the aviation sector: $715 million will be designated to assist Australia’s aviation industry.
• Changes to superannuation: Those affected by the Coronavirus will be able to apply from mid-April 2020 to access up to $10,000 of their superannuation in the 2019/20 financial year, and again in the 2020/21 financial year. Additionally, the minimum payment amounts for account-based pensions will be reduced by half until 30 June 2021.
• Additional support for income support recipients: Income support recipients (including those currently receiving Youth Allowance (Jobseeker), Farm House Allowance and Jobseeker Payment) will be eligible to receive an additional fortnightly payment of $550 for the next 6 months.
Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Bill 2020
The ‘Boosting Cash Flow for Employers’ initiative will provide between $20,000 and $100,000 to eligible small and medium sized businesses and non-profits (including charities), encouraging businesses to retain their employees.
This measure will be provided to eligible businesses that have employees and a turnover of less than $50 million. Businesses must continue to be active to be eligible.
A further payment, equal to the total of all payments received under this initiative, will be made to eligible recipients in the July – October 2020 period.
Guarantee of Lending to Small and Medium Enterprises (Coronavirus Economic Response Package) Bill 2020
Under this Bill, the Government will guarantee 50% of new short-term, unsecured loans to small and medium businesses. This ‘SME Guarantee Scheme’ is capped at up to $40 billion. There is also a temporary exemption from responsible lending obligations, allowing quick and efficient access these loans for small business owners.
Australian Business Growth Fund (Coronavirus Economic Response Package) Bill 2020
This Bill authorises the appropriation of $100 million to invest in the Australian Business Growth Fund.
Assistance for Severely Affected Regions (Special Appropriation) (Coronavirus Economic Response Package) Bill 2020
The Government has dedicated $1 billion to support those most affected by the Coronavirus. Initially, those heavily reliant on industries such as tourism, education and agriculture will benefit from this fund. Initially, it has been announced that fees and charges for tourism businesses operating in the Great Barrier Reef Marine Park, and entry fees for Commonwealth National Parks, will be waived.
Structured Finance Support (Coronavirus Economic Response Package) Bill 2020
This Bill establishes the Structured Finance Support (Coronavirus Economic Response) Fund, which will enable the Government to ensure continued access to funding markets and mitigate impacts on competition in lending markets. The Fund will initially consist of $15 billion.
Appropriation of Funds
A number of Bills propose appropriations from the Consolidated Revenue Fund for ordinary and non-ordinary annual services of the Government, and for expenditure in relation to the Parliamentary Departments:
• Appropriation (Coronavirus Economic Response Package) Bill (No 1) 2019-2020;
• Appropriation (Coronavirus Economic Response Package) Bill (No 2) 2019-2020;
• Supply Bill (No. 1) 2020-2021;
• Supply Bill (No. 2) 2020-2021; and
• Supply (Parliamentary Departments) Bill (No. 1) 2020-2021.
