Economic Impact of the Coronavirus – Australian and South Australian Government Responses plus Where to for Businesses?

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$17.6 billion from the Australian Government and $350 million stimulus, which includes a $15 million investment in upgrades at country hospitals, has been outlined by the South Australian Government.

Many people are asking how will this help and increasingly people are thinking about potential changes to work, education, events and community connections.

So to put these announcements in easy to understand terms the main outcome is to manage employment and jobs including apprenticeships.

Australian Government measures

  • $2.4 billion is to support the health system to manage any further outbreak in Australia
  • For business investment:
  • increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
  • a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
  • Cashflow for businesses:
  • Boosting cash flow for employers – up to $25,000 back to small and medium-sized businesses, with a minimum payment of $2,000 for eligible businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff.
  • Supporting apprentices and trainees – Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020.
  • Payments to households: one-off $750 payment to social security, veteran and other income support recipients and eligible concession card holders.
  • Severely affected regions: $1 billion to support regions most significantly affected by the Coronavirus outbreak specifically for agriculture, education, events and tourism. This will include additional assistance to help businesses identify alternative export markets or supply chains and to promote domestic tourism.

Reviewing the summary table of measures, some are back dated to January 2020 and others are effective immediately.  The statement from the Australian Government states that, “A package of Bills will be introduced into Parliament in the final Autumn sitting week in March 2020 for Parliament’s urgent consideration and passage”, so it will be very interesting to see how these measures get through in terms of any blockages, changes and sticking points.

Is it possible that Australia may even see Parliament run virtually?

You can download fact sheets with more detail here.

South Australian Stimulus Package

For South Australians, similar to other states and territories, alongside supporting the health sector, major infrastructure maintenance projects are being including road and hospital upgrades, new tourism infrastructure and an expanded Economic and Business Growth Fund.  For health in regions the $15 million commitment includes:

  • $2.5 million for fire safety upgrades at health and aged care facilities at Eudunda, Loxton and Kapunda Hospitals;
  • $4.5 million for sterilisation facilities at Naracoorte, Kapunda and Angaston Hospitals;
  • $3 million for the installation of generators and electrical upgrades at Waikerie, Bordertown, Clare, Peterborough and Coober Pedy Hospitals;
  • $5 million for regional aged care facilities and other upgrades.

There isn’t too much detail as yet on how things will roll out however the South Australia Government highlights, “Projects to be funded under the Government’s economic stimulus package must meet certain criteria, including the ability to start works within a short period of time, they must be labour-intensive and/or require significant local purchasing of materials, services and supplies.”

Where to for businesses?

From a business, startup and scaleup point of view, you can already see more of a conversation around ecommerce, online, digital products and programs, virtual engagement and new discovery technologies.

And who knows how this worldwide pandemic will play out in export and import markets?

Entrepreneurs and businesses are already getting products and services to market that support people in quarantine or self-isolation related to exercise, entertainment, food and learning.

What ideas can you come up with and please put your ideas in the comment box below.

Also, if you or someone you know, is a champion at building online shops, ecommerce, online learning, digital products and running virtual summits, then please get in touch via wendy@switchstartscale.com.au – stay safe and well.

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