The package, aimed to provide an immediate stimulus to the economy, will be worth $17.6 billion, with a projected impact of $22.9 billion.
It includes tax relief for small businesses, a $750 one-off cash payment for welfare recipients and wage assistance to keep apprentices in work.
“Each measure is temporary, each measure is targeted, and each measure is proportionate to the challenges we face,” Treasurer Josh Frydenberg told media in Canberra.
Prime Minister Scott Morrison confirmed that the government plans to spend $11 billion before 30 June this year, with the remainder to be injected into the economy before the end of the next financial year.
“This plan is about keeping Australians in jobs. This plan is about keeping a business in business, particularly small and medium-sized businesses, and this plan is about ensuring the Australian economy bounces back stronger on the other side of this and, with that, the budget bounces back with it,” Mr Morrison told media.
Business investment support
Under the plan, the government is lifting the threshold for the instant asset write-off from $30,000 to $150,000, and expanding it to businesses with an annual turnover up to $500 million, up from $50 million.
The government has also allocated $3.2 billion to back business investment by providing a time-limited 15-month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions.
Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase.
The Prime Minister and Treasurer said in a joint statement: “These measures start today and will support over 3.5 million businesses (over 99 per cent of businesses) employing more than 9.7 million employees or three in every four workers.
“The measures are designed to support business sticking with investment they had planned, and encouraging them to bring investment forward to support economic growth over the short term.”
Cash flow assistance for businesses
The government’s package also foresees the injection of $6.7 billion to boost cash flow for SMEs, easing the pressure on them and assisting with wages, investments or preparations for the downturn.
Under this measure, 700,000 businesses with turnover up to $50 million will receive a tax-free cash flow boost worth between $2,000 and $25,000, between 1 January 2020 and 30 June 2020.
According to the government, businesses will receive payments of 50 per cent of their business activity statements or instalment activity statement from 28 April, with refunds to then be paid within 14 days.
Eligible businesses that pay salary and wages but do not withhold tax will receive a minimum payment of $2,000.
A stimulus is also being provided to keep apprentices in work, with small businesses with fewer than 20 full-time employees set to receive up to $7,000 in wage assistance for each apprentice per quarter over the next six months.
The measure, worth $1.3 billion, is aimed to help small businesses maintain or re-employ apprentices and trainees who have lost their jobs from a small business as a result of the coronavirus.
Assistance for severely affected regions
The government has also set up a coronavirus regional and community fund aimed to assist those in the most impacted industries such as tourism and export.
According to the PM, $1 billion has been allocated to support those sectors, regions and communities that have been disproportionately affected by the economic impacts of the coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.
This will include the waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks. It will also include additional assistance to help businesses identify alternative export markets or supply chains.
Targeted measures will also be developed to further promote domestic tourism.