Morrison Government Announces Second Stimulus Package

On 22 March 2020 the Morrison Government announced the second stage of its economic plan in response to the economic impact of the coronavirus.

It amounts to $66.1 billion in addition to the $17.6 billion announced as part of the first round of stimulus. The package includes:

  • Support for households including casuals, sole-traders, retirees and those on income support
  • Assistance for businesses to keep people in a job
  • Regulatory protection and financial support for businesses to stay in business

Prime Minister Scott Morrison said:

“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.”

“Our focus is on cushioning the blow and providing hope to every Australian that we will get through this and come out the other side together.

“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.”

Boosting cash flow for employers

Of particular interest to ES clients will be the efforts to boost cash flow for small and medium sized businesses and not-for-profits:

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.

By linking the payments to business to staff wage tax withholdings, businesses will be incentivised to hold on to more of their workers.

The payments are tax free, there will be no new forms and payments will flow automatically through the ATO.

This measure will benefit around 690,000 businesses employing around 7.8 million people, and around 30,000 NFPs (including charities).

Small and medium business entities with aggregated annual turnover under $50 million and that employ workers are eligible. NFPs entities, including charities, with aggregated annual turnover under $50 million and that employ workers will now also be eligible. This will support employment at a time where NFPs are facing increasing demand for services.

An additional payment is also being made from 28 July 2020. Eligible entities will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments received.

Read the Prime Minister’s media release here.