fbpx

Australian Government’s $17.6 billion economic stimulus for coronavirus downturn – what it means for you?

Find out everything you need to know about Australia’s COVID-19 stimulus package
  Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors

Published on March 19th, 2020

Last updated on August 4th, 2023



Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

At Savvy, our mission is to empower you to make informed financial choices. While we maintain stringent editorial standards, this article may include mentions of products offered by our partners. Here’s how we generate income.

In this article

Over the last few weeks, we’ve seen many stories about decreased activity in the economy and stock markets taking a nosedive.

The Coronavirus disease (COVID-19) control measures have seen wild fluctuations in markets over the past few weeks. The Australian share market is officially in a “bear market” which means losses of at least 20% from all sectors. 

The social distancing directives and bans on large gatherings over 100 people means many businesses are feeling the pinch of decreased economic activity. This has a flow-on effect on jobs, expenditure, and economic growth.

To encourage avoid a recession as much as possible the Reserve Bank of Australia cut interest rates to 0.5% and is expected to cut them again to 0.25% in an emergency meeting this month, the lowest on record.

In response, the Federal Government unveiled a stimulus package for to assist households and businesses.

The government will announce a new round of stimulus measures in the coming days. This is what has already been proposed:

Pensioners and welfare recipients

As part of the first stimulus package announced on the 13th of March, the Federal Government will be sending one-off cash payments of $750 to social security, veteran and other income support recipients and eligible concession card holders to support the economy.

These payments would reach people starting 31st of March and more than 90% of payments are expected to be made by mid-April.

Small business

Small and medium-sized business will be eligible for up to $25,000, with a minimum payment of $2,000.

This is a measure to cover the costs of employee wages and salaries, paid by the Australian Taxation Office based on tax withheld. This does not apply to sole traders or the self-employed.

Approximately $1.2 billion will be made available as a wage subsidy to keep apprentices and trainees in work for up to nine months – January to September 2020.

The government is also providing $3.9 billion in incentives to keep business spending. This includes lifting the instant asset write-off threshold to $150,000 from $30,000 and granting more eligibility to business to use it.

Businesses will also be able to access an investment incentive called the Backing Business Investment (BBI). According to Business.gov.au, BBI is “A time limited 15-month investment incentive to support business investment and economic growth over the short term, by accelerating depreciation deductions. This applies to eligible assets acquired from 12th March 2020 and first used or installed by 30 June 2021. Businesses with a turnover of less than $500 million will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset cost.”

Severely affected regions

The government is setting up a $1 billion fund for regions most effected by the coronavirus disease outbreak. There will also be a fee waiver for national and marine parks to boost tourism.

Guarantees on deposits

In the aftermath of the Global Financial Crisis of 2007-8, the Federal Government instituted the Australian Government Guarantee Scheme for Large Deposits and Wholesale Funding (the Guarantee Scheme). This guarantees deposits of up to $250,000 per customer and per institution. This is to ensure institutions could still access funding and promote financial stability.

There are more stimulus measures to come in the coming weeks and months – check back regularly for updates.

Resources: 

www.abc.net.au/news/2020-03-11/bear-market-share-stocks-investing-superannuation-coronavirus/12046630

www.pm.gov.au/media/economic-stimulus-package

Did you find this page helpful?

Yes
No
Thanks for your feedback!
  Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors

Published on March 19th, 2020

Last updated on August 4th, 2023



Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

In this article

Share this article

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on pinterest

Looking for a car insurance?

Savvy is partnered with Compare the Market to help you compare a range of car insurance policies from a panel of trusted providers.

* Terms and conditions and lending criteria apply.

Smart money saving tips

Subscribe to our newsletter.

By subscribing you agree to our privacy policy

Related articles

Want to receive offers, deals and finance tips from Savvy?
Sign up below

We'd love to chat, how can we help?

By clicking "Submit", you agree to be contacted by a Savvy Agency Owner and to receive communications from Savvy which you can unsubscribe from at any time. Read our Privacy Policy.