Are you one of the one in four who’ll qualify for a $750 coronavirus cash handout?
If so, when will you get it? And what will you do with it?
Scott Morrison’s billion dollar stimulus package aims to get many Australians through a tough time, with $4.8 billion doled out in $750 portions to over six million residents who already receive some form of welfare or pension, be it the Age Pension, Newstart, Austudy, disability support pension, carer’s allowance or family payment.
For those who do qualify, the one-off payment will be delivered using existing welfare systems into bank accounts from 31 March, 2020, by Services Australia or the Department of Veterans’ Affairs. Most payments should be made by mid-April 2020.
By targeting low-income earners and age pensioners, the government hopes recipients will spend it to boost the economy and, hopefully, avoid a recession.
However, new analysis suggests it may not be enough to prevent Australia’s first recession since 1991.
Aside from the $4.8 billion in handouts, another $8 billion will go towards wage subsidies and a major expansion of the instant asset write-off program and around $11 billion will go to businesses and households.
Where will the money go after that?
The experts say retailers, fast food outlets and gaming companies will be the big winners of the government’s cash splash, with pensioners and Newstart recipients expected to spend their windfalls on small-ticket items such as new shoes, clothes and fish and chips.
Retailers, pensioner groups and economists are hailing the PM’s plan as ‘sensible and the fastest way to inject money into the economy’, according to The Australian.
Small business will also benefit, says the Business Council of Australia, which believes the package will save many jobs.
BHP chief executive Mike Henry, while praising government’s “calm and methodical approach” in an “extremely challenging time”, believes “the coming weeks and months will challenge the Australian economy and the resolve of all Australians”.
“Moves to stimulate the economy, support small business and provide an additional safety net for the vulnerable in our community is the right thing to do,” said Mr Henry.
National Seniors Association chief advocate Ian Henscke said about 180,000 older people on the Newstart Allowance would spend the money on basic items such as food, clothing, medical appointments, car repairs and tyres.
“If you put it in realistic terms, [the $750 payments] is a bit more than $2 a day, so it’s not a huge amount,” Mr Henscke told The Australian.
“But obviously those who will get it will be grateful because if they were waiting to go to the dentist or buy a pair of shoes they now can.
“We hear stories from people that their only ‘takeaway mea’l is when they get the pension once a fortnight. One man I know says he looks forward to getting his pension cheque because that’s when he buys fish and chips – that’s his one treat.”
Retail giants Target, Kmart and Big W are hoping the money will be spent on children’s and budget clothes.
The biggest concern for retail during this pandemic should be to keep people employed, says outgoing Australian Retailers Association executive director Russell Zimmerman, who hopes this package will support businesses enough to achieve this end.
“It’s very targeted to the requirements of people who need it now rather than just being handed to everyone no matter who they are,” Mr Zimmerman said.
“These are people who have not had the money to buy extras in life, so any support that the government can give them is great. That money will flow on into the retail industry and we will see a far stronger retail economy moving forward.”
National Australia Bank chief economist Alan Oster agrees that giving pensioners and welfare recipients a little extra was the fastest way to inject that money into the economy.
“They will spend it,” he said. “It doesn’t go into the accounts until around 31 March so it will get spent in the June quarter and the poorer they are the more likely it is to be spent.
“If you have discretionary income, you would be unlikely to spend that money, which is what I think the government is trying to do.
“Retail will be helped to get over a difficult period by this, but it depends on what retailer you are. If you are in hospitality, things like that, I think it will be a problem. Department stores and, I suspect, supermarkets are doing better … I think basically the cash to households is deliberately being targeted to boost retail spending in the second quarter.”
Strip malls and smaller shopping centres may be bigger beneficiaries than larger malls, as consumers have been avoiding these spaces for fear of infection.
Immediate winners are likely to be convenience stores and neighbourhood shopping centres, as well as smaller liquor stores such as BWS and Liquorland, as people may choose to avoid pubs and social gatherings.
Tabcorp is also expecting a boost, although YourLifeChoices members believe that pokies could be a breeding ground for the virus’ spread.
All in all, the government’s package – which also includes $25,000 payments to businesses with annual turnover of $50 million, $7000 payments to support apprenticeships and raising the instant asset write-off threshold from $30,000 to $150,000 – was “well thought through”, says the Business Council of Australia.
However, “the longer the coronavirus goes on, the more vulnerable Australia’s biggest companies will become,” said Business Council of Australia chief executive Jennifer Westacott.
“So, the [federal] budget is the next opportunity to shore up our competitiveness and permanently change the trajectory of the economy.
What do you think of the government’s stimulus package? Do you qualify for the $750 handout? How will you spend it?
If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.