The government will give $750 to everyone on pensions and benefits, to veterans and to seniors with health care cards, as part of a $22.9 billion package to shore up the economy and jobs.
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The cash hand-outs were announced on Thursday by Prime Minister Scott Morrison, who has front-loaded his stimulus for maximum immediate impact, with the measures all ending in June next year. Mr Morrison said it had been designed to ensure it didn't "bury the budget for a decade".
From the end of March about 6.5 million welfare recipients and pensioners will receive a one-off, tax-free $750 cheque, at an overall cost of $4.8 billion.
The government is establishing a $1 billion fund to help businesses in hard-hit areas, including waiving fees for the Great Barrier Reef marine park and national parks for tourism operators and helping industries such as crayfishing, which rely on exporting to China.
Mr Morrison said the package would also support education, but didn't explain details. This aspect of the package remains vague, with Mr Morrison saying he would work with states and territories on how to roll it out.
He announced a 0.5 point cut to deeming rates for aged pensioners relying on investments by 0.5 percentage points, in a long-called-for measure.
Mr Morrison said the package deliberately avoided setting up "fancy new schemes" requiring application forms, which risked integrity issues and the potential to spin off in new directions.
Treasurer Josh Frydenberg said it could add 1.5 per cent to Australia's GDP in the June quarter but neither he nor Mr Morrison hazarded a guess on whether it would keep Australia out of recession. The impact would depend on the behaviour of the coronavirus in the quarter, Mr Frydenberg said.
The coronavirus crisis differed from the global financial crisis in that interest rates were so low that "monetary policy was pretty much exhausted", he said.
Mr Morrison didn't release an amended forecast for what is now set to be a budget deficit rather than surplus, but said the budget impact would depend also on the global economy.
The government is helping pay the wages of apprentices until September with a 50 per cent subsidy. It is allowing small and medium businesses to instantly write off equipment purchases up to $150,000 until the end of June. Other businesses will be able to accelerate the depreciation of assets until June 2021.
The government is giving businesses grants of up to $25,000 each between now and the end of June, depending on the number of staff they pay.
Casuals are still out in the cold from the government's handouts and help. The grants to business will encourage them to keep staff on, but if casuals do lose their jobs or have to self-isolate they will lose income unless their employer helps out. Mr Morrison said Telstra had announced plans to help casuals. And he said the government would waive the waiting period for a Centrelink sickness payment for casuals and people on Newstart.
Social Services Minister Anne Ruston said the change to deeming rates would help 565,000 age pensioners and another 323,000 people who relied on investments for their income.
The deeming rate would be cut from 1 per cent to 0.5 per cent for single pensioners with investments up to $51,800 and $86,200 for pensioner couples. The upper deeming rate would be cut from 3 per cent to 2.5 per cent.
The deeming rate is the amount the government "deems" people to have earned from their investments when it calculates their pensions. Senator Ruston said singles could end up with up to $50 extra a fortnight and couples with up to $62 a fortnight. Age pensioners would receive an average $8.42 extra a fortnight, $219 a year, with the money appearing in bank accounts from May 1.
Mr Morrison said the stimulus would cost $22.9 billion, the equivalent of 1.2 per cent of gross domestic product. The net cost was $17.63 billion - because if businesses were writing assets off now, fewer would be depreciating assets over time, meaning a lesser cost to budgets down the track.
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The Prime Minister also used a prime time televised address to offer reassurance about the nation's response to COVID-19.
"We'll get through this together, Australia, we all have a role to play," he said.
- with Doug Dingwall
