Economic stimulus package and health care package
Over the past two days, the Australian Government has released the details of a $17.6 billion economic stimulus package and a $2.4 billion health package aimed at responding to the health and economic challenges posed by the spread of the coronavirus / COVID-19.
Given the already significant impact on both consumers and businesses, the main rationale behind these packages is to target key areas in the economy in the hope that the Government may be able to mitigate the risk an economic downturn whilst at the same time, seeking to ensure that vulnerable groups, such as senior Australians, have the medical support they need.
The main details of each package are set out below:
Economic Stimulus Package
Given the significant economic challenges posed by the spread of the coronavirus / COVID-19, yesterday the government announced a $17.6 billion economic stimulus package to help with Australian jobs and keeping small and medium enterprises in business.
The package comprises of four main parts.
Increase in the instant asset write off threshold and accelerated depreciation deductions
To offer support to business investment the instant asset write off threshold will be increased from $30,000 to $150,000 for all businesses with an aggregated annual turnover of less than $500 million (previously $450 million).
This instant asset write off will be available until 30 June 2020.
To support business investment and economic growth, businesses with a turnover of less than $500 million will be able to deduct an additional 50% of the asset cost in the year of purchase.
This initiative will be available until 30 June 2021.
To help pay wages and hire additional staff, small and medium sized employers with a turnover of less than $50 million that employ staff between 1 January 2020 and 30 June 2020 will be entitled to a payment of up to $25,000 tax free. These payments will be available through the BAS system.
For those employers who employ apprentices or trainees between 1 January 2020 and 30 September 2020, a wage subsidy of 50% of the apprentice’s or trainee’s wages is available for up to 9 months.
From 1 March 2020, a one off tax free $750 stimulus payment will be provided to pensioners, social security, veteran and other income support recipients and eligible concession card holders. These payments are expected to be made by mid-April.
To support those industries likely to be most affected, such as tourism, agriculture and education, there will be various forms of support and assistance provided.
The details of this assistance are yet to be announced but the Government has indicated that the support required will be determined in consultation with the affected industry.
In addition to the above, the Government intends to offer “administrative relief” for certain tax obligations in the form of deferring tax payments for up to four months. This will be assessed on a case by case basis.
To ensure that the Australian health system is well-prepared for the fight against coronavirus / COVID-19, on 11 March 2020 the Government released its Health Package. The main aim of the package is to ensure that people can access essential care in a way that reduces their potential exposure to infection.
The package comprises of several main parts:
Primary care which includes:
- Funding for a new Medicare service for people in home isolation or quarantine to receive health consultations via the phone or video, this service will be available from Friday 13 March 2020;
- Funding for home medicine services which will enable patients to have their PBS prescriptions filled online or remotely, and have medicines delivered to their home;
- Fast tracking of electronic prescribing by GPs;
- Access to services via the GP, telehealth, national hotline, state hotline, dedicated respiratory clinics and hospitals;
- National triage phone line operating 24/7 to provide advice to patients;
- A contribution of $206.7 million for p to 100 dedicated respiratory clinics;
- Additional tools to screen visitors and fly-in / fly-out workers in remote locations; and
- Establishment of a dedicated Medicare funded and bulk billed pathology test for COVID-19 and influenza.
Aged care which includes:
- Education and training for aged care workers in infection control;
- Assistance in hiring additional nurses and aged care workers for residential and home care;
- An allocation of $30 million in infection control training and programs for health and aged care workers; and
- Additional funding provided to the Aged Care Quality and Safety Commission to improve infection control.
Hospitals and research which includes:
- Uncapped Government support of up to 50% in additional costs incurred by hospitals in diagnosing and treating patients; and
- Allocation of $30 million toward development of a vaccine, anti-viral and medicine research.
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Ann-Maree Ventura Special Counsel