Prime Minister Scott Morrison announces $18 billion economic stimulus package

Amid the economic slowdown due to Coronavirus, Australian Prime Minister Scott Morrison has announced $17.6 billion in stimulus measures.

Focused on businesses, millions of Australians will also receive cash payments.

The package includes:

• Welfare recipients: an extra $750 per person
• Small businesses with apprentices: up to $21,000 to keep apprentices in work through wage subsidies
• Small to medium-sized businesses: between $2,000 and $25,000 to help with cashflow
• Businesses generally (excluding the very largest): the instant asset write-off threshold raised to $150,000 and an extra depreciation discount to encourage investment
• Affected businesses: access to a new $1 billion fund

Announcing the stimulus, Prime Minister Morrison (pictured below) said the focus of the stimulus was on businesses "because our goal is to keep people in work", advising "it is about a cash injection into the Australian economy, which supports small businesses and supports medium businesses.”

He also confirmed that all measures were temporary, meaning while welfare recipients receive a short-term cash boost, payment rates remain fixed.

The Government promised that payments to welfare recipients will start on 31st March 2020 with more than 90% payments "expected to be made" by mid-April.

Legislation will be introduced into Federal Parliament later this month to give effect to these measures.

Federal Treasurer Josh Frydenberg said $11 billion of the $17.6 billion package would be paid by the end of June.

Cash flow support for businesses will arrive by way of payments of 50% of their Business Activity Statements or Instalment Activity Statement from 28th April, with refunds to then be paid within 14 days.

Businesses will be able to register for apprentice wage subsidies from 2nd April, but more than $1 billion of this $1.3 billion measure isn't budgeted until next financial year.

Business claiming tax write-offs will benefit the next time their tax is calculated, while benefits from the depreciation deduction will extend to 30th June 2021.

The cash payments to small and medium businesses is the largest component of the package, worth around $8 billion.

Changes to the instant asset write-off and deprecation deduction tally around $4 billion.

Prime Minister Morrison indicated earlier this week that the economic impact of the coronavirus could be worse than the global financial crisis.

He flagged there might be more spending in the May Federal budget, but said in relation to today's announcement, "we believe these measures are the measures that can do the job and we will continue to monitor events as we go forward."