Here's what's in ScoMo's $17.6bn stimulus package, but will it be enough?

This morning the Morrison government unveiled its stimulus package to help fight the coronavirus drag on the economy.

The stimulus was labelled temporary, targeted and proportionate to the challenge faced. The government also promised it would not undermine the structural integrity of the budget.

The package includes:

$3.9bn to help businesses reduce their tax bill through accelerating depreciation. Until June 30, 2021 businesses with a turnover of less than $500m can deduct an extra 50 per cent of an asset’s cost of purchase from their tax bill. Also, the instant asset write off threshold is up from $30,000 to $150,000, for this financial year only;
Tax-free payments for eligible businesses of 50 per cent of their Business Activity Statements from April 28;
$4.8bn of one-off $750 stimulus payments to pensioners and other income support recipients; and
$1bn towards waiving fees and charges for tourism businesses operating in Commonwealth National Parks and the Great Barrier Reef marine park.

The federal government also promised that the tax office would allow administrative relief for tax obligations on a case by case basis.

“Our targeted stimulus package will focus on keeping Australians in jobs and keeping businesses in business so we can bounce back strongly,” Prime Minister Scott Morrison said.

“The economy needs temporary help right now to bounce back better so the livelihoods of all Australians are protected.”

Victorian Chamber of Commerce and Industry boss Paul Guerra believes this will help businesses.

“This package won’t solve the coronavirus problem but will help ease the cashflow hardship many businesses are facing and help them to pay bills, pay staff and stay afloat,” he said.

Industries like what they see, but remain nervous

While a number of industry bodies liked what they saw, some suggested the package could go further.

The CEO of Master Builders Australia, Denita Wawn, said the 380,000 building and construction small businesses would benefit from the instant write off, but she cautioned the government to keep watching the situation.

“If there is a major contraction in building activity then the benefit of these measures will be blunted,” she said.

“The government must take a strong leadership role in ensuring that construction of government projects currently underway continue and that projects scheduled to commence are not delayed or withdrawn.

“Our industry also remains nervous about how protracted the inevitable shortage and delayed delivery of imported building products will be. This is a hit to our industry that is looming over the next few months and additional measures and extensions of some stimulus measures may be required to help the industry weather that storm.”

One potential risk is that recipients of the stimulus package may choose to save rather than spend the money.

Paul Drum, a spokesperson for accounting industry advocate CPA Australia, urged people to spend their cash at Australian businesses. He also warned the government may need to consider further measures as the crisis evolves.

Arguably the most important industry right now, the health and pharmaceutical industry, has welcomed the stimulus measures.

“As frontline health professionals, pharmacists will continue to play a key role during COVID-19 and the influenza season, and these measures announced today will provide important stimulus to many pharmacies to continue to provide much needed healthcare to their patients,” Pharmaceutical Society of Australia president Chris Freeman said.