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New government stimulus support for small business

A second stimulus package has been introduced as an increasing number of businesses and workers feel the economic impact of Coronavirus.

The second stage includes a $66.1 billion support package, in addition to the $17.6 billion first stage, and $90 billion from the RBA and $15 billion from the government to facilitate access to finance already announced.

It comes as enforced closures of non-essential services saw an unprecedented number of workers suddenly facing unemployment. As many as one million Australians are forecast to lost their jobs on the back of the virus.

Among the support offered in stage two is support for casuals, sole-traders, retirees and people on income support; measures for businesses to help keep people in employment; financial support for businesses and regulatory protection.

“We want to help businesses keep going as best they can and for as long as they can, or to pause instead of winding up their business. We want to ensure that when this crisis has passed Australian businesses can bounce back,” Prime Minister Scott Morrison said.

“Our focus is on cushioning the blow and providing hope to every Australian that we will get through this and come out the other side together.

The total $189 package is estimated to equal 9.7 per cent of Australia’s GDP.

The eligibility for accessing income support has been extended and a temporary Coronavirus supplement will be introduced to JobSeeker, Youth Allowance, Parenting Payment, Farm Household Allowance and Special benefit recipients. This will be a $550 supplement, additional to existing payments, to be paid fortnightly for six months.

It comes as people had to be turned away from Centrelink offices yesterday when the government website crashed amid a large and sudden spike in website traffic to access information.

Small and medium sized businesses can access payments between $20,000-$100,000 aimed at keeping businesses in a position to retain staff, pay outgoings and continue to operate. Businesses will annual turnover below $50 million who employ staff are eligible.

It follows calls last week from Australian Small Business and Family Enterprise Ombudsman Kate Carnell for more government support for small businesses and sole traders.

Employers will be able to access a payment equal to 100% of their salary and wages withheld up to $50,000, from April 28.

Payments will be linked to staff tax withholdings and will be made via the ATO.

Small and medium enterprises (SMES) will also be able to access working capital via a government led Coronavirus SME Guarentee Scheme, which will guarentee 50% of new loans.

The Scheme will support up to $40 billion in lending.

Additional measures include an increase in the threshold for creditors to issue statutory demand on companies and an increase in the deadline for companies to respond to demands.

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