The Morrison government’s package to deal with the fallout from the coronavirus will inject A$17.6 billion into the Australian economy.
Prime Minister Scott Morrison said the gross impact of the stimulus in this financial year and the next two financial years would be A$22.9 billion or 1.2 percent of GDP.
“This is a significant investment,” Morrison said in Canberra on Thursday, as he unveiled business and demand stimulus measures.
Pensioners, Welfare Recipients Get Cash
More than 6.5 million pensioners and welfare recipients will get A$750 cash payments from March 31 to help them through the coronavirus crisis.
The A$4.8 billion plan will cover recipients on Newstart, disability support pension, carers’ allowance, youth allowance, veterans support payments, family tax benefits, commonwealth senior health card-holders and 2.4 million aged pensioners.
“It’s not for us to tell those Australians how to spend their money, but what we do know from experience is that they will spend that money and that money will encourage economic activity,” Treasurer Josh Frydenberg said.
“The more economic activity that we see through the June quarter, in particular, will be important, because in the June quarter, just as we’ve seen in the March quarter, the spread of the coronavirus has had an impact across the economy.”
As well, casual workers will get immediate access to a sickness payment if they need to self-isolate.
Changes will also be made to the pension deeming rate, with an average benefit of A$219 a year to age pensioners.
The lower deeming rate will be cut from 1.0 percent to 0.5 percent for financial investments up to $51,800 for single pensioners and A$86,200 for pensioner couples.
The upper rate, which only impacts about 40 percent of payment recipients with deemed assets, will decrease from 3.0 percent to 2.5 percent.
Under the new rates, payment recipients whose income is assessed using deeming could receive up to $62 a fortnight for couples (A$1612 extra a year), and up to $50 a fortnight for singles (A$1300 a year).
The extra money will start flowing through into people’s bank accounts from May 1.