A $20 billion loan guarantee for small businesses, $31.9 billion of grants to encourage small businesses to keep workers and $18 billion of support for welfare recipients and people who lose their jobs are the key elements in the federal government’s second round COVID-19 economic response.
That adds to a $17.6 billion stimulus package announced earlier this month, $15 billion to buy asset backed securities from small lenders, and a $90 billion Reserve Bank facility for bank liquidity.
Adding to a total of $189 billion, the combined packages are equal to about 10 per cent of GDP.
Small and medium sized businesses and non-profits with turnover below $50 million will receive payments of up to $100,000 to pay bills and retain staff.
That will cost $31.9 billion.
A loan guarantee scheme will underwrite 50 per cent of new small business loans up to a value of $20 billion, which would support $40 billion of loans.
There’s also a big regulatory change which will increase the threshold for creditors issuing statutory demands, and will provide relief for directors trading while insolvent.
Direct payments to households will include a $550 per fortnight Coronavirus supplement as an addition to existing JobSeeker, Youth Allowance jobseeker, parenting and farm household allowance payments.
The supplement will be paid for six months.
Other social security and veteran income support recipients, including pensioners, will be given a second $750 payment, in addition to a similar figure announced last year.
That will apply to 5 million people and cost $4 billion.
“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,” Prime Minister Scott Morrison said.
“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.
“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.”
