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Australia announces second coronavirus package worth $66 billion

The Australian federal government has announced its second stimulus package worth an extra $66 billion to help the economy through the coronavirus outbreak.

Here are some of the highlights:

More support for smaller businesses with employees

The support for smaller businesses that employ people is increasing in this package. The tax-free payment is now increased to 100% of the PAYG tax that small and medium businesses withhold from wages, up to a maximum of $100,000. Eligible business will receive a minimum total of $20,000 over the coming quarters, even if they are not required to withhold tax.

Apprentices will be supported with $1.2 billion for a wage subsidy of 50% of the apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. If that apprentice can’t be retained, the subsidy will be available for a new employer.

Business loan guarantees

The government also announced a small and medium business guarantee which is available for businesses with revenue of less than $50 million.

The federal government will guarantee 50% of an eligible loan with banks and non-bank leaders to businesses affected by the coronavirus. These loans will be used for working capital and the loans will be unsecured.

A coronavirus income supplement

The federal government also announced a new, time-limited coronavirus supplement of $550 per fortnight for the next six months, costing $14.1 billion. It will double the current rate of Newstart, which will soon be called a Jobseeker payment.

People who receive income payments from the government already will get the extra coronavirus payment on top of their existing payments.

This payment will also be available for sole traders where their business has been suspended or significantly reduced as a result of the coronavirus pain.

Another $750 payment

Another $750 payment has been announced for people who receive social security and veteran income support recipient concession cardholders.

However, this won’t be for the people that get the $550 payment per fortnight.

Access superannuation

People in financial stress will be able to access $10,000 of their superannuation in FY20 and another $10,000 in FY21.

If you’re unemployed, are eligible for a jobseeker payment, youth allowance for jobseekers, parenting payment, special benefit or the farm household allowance you can apply to access your super.

Also, if your working hours were reduced by 20% (or more) or if a sole trader business has suspended operations or its turnover has reduced by 20%, it will eligible.

Retiree changes

The government is temporarily reducing the minimum superannuation drawdown rate by 50% for the account-based pension. This is so that retirees have more flexibility about how they manage their superannuation assets.

The government also announced that it was reducing the deeming rate for pensioners by another 0.25% to reflect the recent RBA interest rate.

What businesses does this affect?

I mean, I could name the entire S&P/ASX 200 Index (ASX: XJO) and a lot of them will be affected at least indirectly.

Some of the businesses that could be most affected are: Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ), National Australia Bank Ltd (ASX: NAB), IOOF Holdings Limited (ASX: IFL), AMP Limited (ASX: AMP), Netwealth Group Ltd (ASX: NWL), Hub24 Ltd (ASX: HUB), Xero Limited (ASX: XRO), Magellan Financial Group Ltd (ASX: MFG), Perpetual Limited (ASX: PPT), Pendal Group Ltd (ASX: PDL) and Australian Ethical Investment Limited (ASX: AEF).

It’s clear that the economic disruption is continuing and may be prevalent for a number of months.

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Tristan Harrison owns shares of Australian Ethical Investment Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Australian Ethical Investment Ltd., Hub24 Ltd, and Netwealth. The Motley Fool Australia owns shares of National Australia Bank Limited and Xero. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. and Hub24 Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.