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The Federal Government’s Stage 2 stimulus package includes an extra $66.1 billion in stimulus measures, taking the total package in response to the Covid-19 crisis to $189 billion.

The package includes a new loan facility (supporting $40 billion of lending to SMEs) called the Coronavirus SME Guarantee Scheme which will become available to small-medium enterprises affected by COVID-19. Examples could include if a staff member became affected by the virus. The Government will guarantee 50 per cent of new loans issued (by eligible lenders) to SMEs. The facility is expected to be in place by April.

Additionally the Government is enhancing the Boosting Cash Flow for Employers measure it announced on 12 March 2020. The Government is providing up to $100,000 to eligible small and medium-sized businesses, and not for-profits (NFPs) that employ people, with a minimum payment of $20,000. The payments will go to employers as a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent announced in the Stage One package), with the maximum payment being increased from $25,000 to $50,000 and the minimum payment increased from $2,000 to $10,000. The payments are tax free and will flow automatically through the ATO.

A business hotline for SMEs impacted by Covid-19 will now be available seven days per week, operating 7am – 11pm AEST. The hotline is 13 28 46.

In summary, the Stage Two package also includes: 

• Easier access to some social security payments and a supplementary payment of either $550 or $750 (depending on your welfare payment) on top of existing payments for 6 months. This includes farmers in receipt of the Farm Household Allowance.
• Access of up to $10,000 of an individual’s superannuation in 2019-20 and a further $10,000 in 2020-21, tax free, for those in financial stress as a result of the Coronavirus. 
• Temporary reductions in superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for 2019-20 and 2020-21 for retirees, and further reductions to deeming rates by 0.25 percentage points from those announced in the Stage One package
• Temporarily increased thresholds at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands; temporary relief for directors from any personal liability for trading while insolvent; and, amendments to the Corporations Act 2001 to provide temporary and targeted relief for companies to deal with unforeseen events that arise as a result of the Coronavirus.  

These measures build on Stage One measures, which included: increasing the instant asset write off; accelerated depreciation deductions; support for apprentices and trainees; and targeted support for Coronavirus-affected regions and communities. They are also in addition to measures announced by the Reserve Bank and additional government assistance for airlines.

More information on the Federal Government’s Economic Response to the Coronavirus (including fact sheets) can be found here.