During the strictest COVID-19 related restrictions, the Federal Government introduced a range of stimulus measures designed to assist the recovery, with a number of these payments already being implemented. The main stimulus measures include the introduction of the $1,500 JobKeeper package, an increase of the fortnightly JobSeeker payment and a one-off $750 payment for some welfare recipients.

An overview of the different measures can be seen below and full details of each measure can be seen here.

On Monday 7 April, the Federal Government released details of its Commercial Tenancies Code of Conduct that intends to impose a set of good faith leasing principles for application to commercial tenancies (including retail, office and industrial) between owners/operators/other landlords and tenants, in circumstances where the tenant is a small-medium sized business (annual turnover of up to $50 million) and is an eligible business for the purpose of the Commonwealth Government’s JobKeeper program.

The National Cabinet agreed there would be a proportionality to rent reductions based on the tenant’s decline in turnover to ensure that the burden is shared between landlords and tenants. The Code provides a proportionate and measured burden share between the two parties while still allowing tenants and landlords to agree to tailored, bespoke and appropriate temporary arrangements that take account of their particular circumstances.

For more information and to read the National Cabinet Mandatory Code of Conduct – SME Commercial Leasing Principles during COVID-19, click here.

On Monday 30 March Prime Minister Scott Morrison announced a third economic stimulus package that effectively gives business $1500 per employee per fortnight for the next six months.

The third stimulus package is designed to allow businesses to survive the initial shockwaves from the COVID-19 pandemic and retain employees even if they are effectively going into hibernation.

The stimulus package will include:

  • Employers and sole traders will be able to apply for $1500 “job keeper” flat payment per employee to keep on their staff.
  • To be eligible, employers will need to have lost 30 per cent of income or 50 per cent of income if the company has a annual revenue of more than $1 billion
  • The $130 billion package will support the wages of up to 6 million Australians throughout the coronavirus crisis.
  • Those who work for non-for-profits and New Zealanders will also be eligible to the “job keeper” payment
  • The income threshold for the partner of someone who has lost their job has been raised from $48,000 to $79,000 a year.
  • Workers who have already been stood down will be able to access the payment if they lost their job after March 1.

The jobkeeper subsidy will be eligible to all businesses, large and small, with full time, part time and casual (if they have been with the employer for 12 months or more) members of staff eligible to receive the subsidy.

The payments will be available from 1 May and will be backdated to today, with business that have needed to stand staff down since 1 March able to and encouraged to rescind the stand down notices and re-employ those staff members.

Combined with the previous economic measures, over $320 billion will be injected into the economy in a bid to avert the economic impacts of COVID-19.

For more information about the new measures, click here.

On Sunday 22 March Prime Minister Scott Morrison announced a further $66 billion economic stimulus package to complement the previously announced stimulus package on 12 March and the economic assistance measures announced by the Reserve Bank of Australia on 19 March.

This second economic package is primarily aimed at small and medium businesses, including not-for-profits as well as supporting those currently seeking work. It has three parts:

  • 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

Its headline features include:

  • Up to $100,000 to be paid 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.
  • An establishment of 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.
  • A $550 coronavirus supplement to be paid to existing and new recipients of the JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit. The Coronavirus supplement will be paid for the next 6 months
  • A further $750 payment to social security and veteran income support recipients and eligible concession card holders, except for those who are receiving an income support payment that is eligible to receive the Coronavirus supplement. This second payment will be made automatically from 13 July 2020 to around 5 million social security, veteran and other income support recipients and eligible concession card holders.
  • Individuals in financial stress as a result of the Coronavirus will be allowed to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.
  • A temporary reduction in superannuation minimum drawdown requirements for account based pensions and similar products by 50 per cent for 2019-20 and 2020-21.

To find out more information about the stimulus measures and the economic support from the Federal Government, click here.

On Thursday 12 March Prime Minister Scott Morrison announced a $17.6 billion economic plan to keep Australians in jobs, keep businesses in business and support households and the Australian economy as the world deals with the significant challenges posed by the spread of the coronavirus.

Prime Minister Scott Morrison unveiled details of the package, with forecasts that it represents a 1.2% boost to the nation’s GDP.

The stimulus package is focused on keeping Australians in jobs and helping small and medium sized businesses to stay in business.

The package has four parts:

  • Supporting business investment
  • Providing cash flow assistance to help small and medium sized business to stay in business and keep their employees in jobs
  • Targeted support for the most severely affected sectors, regions and communities;
  • Household stimulus payments that will benefit the wider economy

Its headline features include:

  • A $6.7 billion provision for tax-free payments between $2000 and $25,000 for businesses with turnover up to $50 million – calculated based on withholding tax obligations on employee salaries. This is estimated to benefit up to 690,000 companies employing 7.8 million people
  • A $1.3 billion package to support retention of apprenticeships, with up to $7000 per quarter available as a wage subsidy to support retention or employment of apprentices in businesses of less than 20 employees. This is backdated to January 1 and supports up to 120,000 jobs
  • Expanding the instant asset write off scheme – with the write-off threshold rising from $30,000 to $150,000, and turnover threshold for businesses rising from $50 million to $500 million. Eligible businesses total 3.5 million
  • A 50% accelerated depreciation deduction over and above existing deductions, available to June 30, 2021
  • A $750 one-off payment to aged pension, Newstart recipients and other welfare recipients – with an estimate 6.5 million people receiving the payment
  • Creation of a $1 billion regional community fund to support hard-hit regions and sectors, with a focus on tourism and export industries

To find out more information about the stimulus measures and the economic support from the Federal Government, click here.

Reserve Bank of Australia

On Thursday 19 March the Reserve Bank of Australia (RBA) cut the official cash rate for the second time in a month to Australia’s lowest ever rate of 0.25%.

The RBA made the out-of-cycle cut following the unprecedented impact on the economy following the outbreak of COVID-19 and the move from several countries around the world, including Australia, to restrict the movement of people across borders.

The rate cut was part of an economic package agreed upon by the RBA board to support the Australian economy and has been designed to complement the fiscal response from governments across Australia. The full economic package announced by the RBA is as follows:

  1. A reduction in the cash rate target to 0.25 per cent.
  2. A target for the yield on 3-year Australian Government bonds of around 0.25 per cent.
  3. A term funding facility for the banking system, with particular support for credit to small and medium-sized businesses.
  4. Exchange settlement balances at the Reserve Bank will be remunerated at 10 basis points, rather than zero as would have been the case under the previous arrangements.

In a statement announcing the cut, RBA Governor Dr Philip Lowe said “at some point, the virus will be contained and the Australian economy will recover. In the interim, a priority for the Reserve Bank is to support jobs, incomes and businesses, so that when the health crisis recedes, the country is well placed to recover strongly.

“The various elements of this package reinforce one another and will help to lower funding costs across the economy and support the provision of credit, especially to small and medium-sized businesses.

“Australia’s financial system is resilient and well placed to deal with the effects of the coronavirus.”

To read the full statement from Dr Lowe, click here.