Australia

Federal Government pledges $66 billion for businesses hit hard by coronavirus

Diners have already been staying home rather than eating out. Source: AAP

The Morrison government is adding $66 billion to its economic stimulus and flagged a third round will be needed as the coronavirus impact continues to bite.

An extra $66 billion will be on offer to help Australian businesses and workers stay afloat during the coronavirus crisis.

The Morrison government is announcing its second set of stimulus measures, just 10 days after it first moved to diminish the economic blow of the virus and the measures to combat it.

And it has flagged a third round of stimulus is likely to be needed.

Sunday's package includes a significant expansion of the wage-based cash payments to small businesses already announced.

Small and medium businesses and not-for-profits who employ people will now receive a full rebate on income tax withholdings, up to $100,000.

Empty tables at a restaurant in Circular Quay in Sydney.
Empty tables at a restaurant in Circular Quay in Sydney.
AAP

They'll all get a minimum of $20,000 - 10 times the amount announced previously.

This is expected to help some 690,000 businesses employing about 7.8 million people, along with 30,000 not-for-profits who weren't previously set to receive the cash flow injection.

It will inject an extra $25.2 billion into the cash flow of businesses, on top of the $6.7 billion already announced.

The government is also setting itself up as a loan guarantor.

Businesses can borrow up to $250,000 unsecured with the government's backing and won't have to make repayments for the first six months

The measure won't apply to existing customers refinancing, who will already get a six-month freeze on repayments under steps the banks announced on Friday.

Prime Minister Scott Morrison said the aim is to let small businesses know the government has their back so they can be confident of navigating the crisis.

"Many of our restaurants and bars, our hotels and tourism operators, our hairdressers and beauty salons and our events companies already feeling the brunt of the economic impact of coronavirus," he said in a statement.

It is all about getting the nation through the next six months.

"There is a lot of pain coming but we're going to cushion the blow as best we can," he said.

"In the event that someone does regrettably lose their job because of the coronavirus, it's very important that business give their workers the confidence that this is just temporary and ... when they reopen their doors and get back to business, that they will want to get them back on the payroll as soon as possible."

The announcement on Sunday is also expected to include income support for people who lose their jobs.

The first package, worth $17.6 billion, included cash for pensioners and people on welfare, wage subsidies for apprentices and expanded tax breaks for businesses buying new equipment.

However, these measures came under fire for offering little to sole traders and not-for-profits and as the scale of the crisis grows it has quickly become apparent much more was needed.

The Reserve Bank and government have also made $105 billion available to banks to give low-interest loans to businesses.

Economists forecast nearly a million people could be out of work by October as the nation stays at home in a bid to slow the spread of the virus.

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