Second Reading SpeechMr FRYDENBERG (Kooyong - Treasurer)
That this bill be now read a second time.
The bills I introduce today represent the most significant set of measures to support the Australian community and the Australian economy outside of wartime.
We confront an enemy without a flag or a face, and we are deploying every weapon in our arsenal to defeat it. This is a Team Australia moment, and we call upon all sections of the Australian community to join in this struggle.
The measures in these bills represent a decisive and unprecedented response to the economic challenges posed by the coronavirus. The global and domestic economic environment has deteriorated. We now expect the economic shock from the coronavirus to be deeper, to be wider and to be longer. Our response, totalling $189 billion, or around 10 per cent of GDP, will provide the hope and support millions of Australians need at this difficult time.
The Coronavirus Economic Response Package Omnibus Bill 2020 is designed to keep Australians in jobs and businesses in business, and build a bridge to the recovery. These measures are consistent with our principles. They are targeted, they are temporary, they are scalable and they are based on our existing tax and transfer system. The measures contained in this package of bills are designed to bolster domestic confidence and household consumption, reduce cashflow pressures for businesses and support investment to lift productivity and to keep people in jobs.
The package targets four key areas:
- households, through two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders - around half of whom are pensioners; and a new time limited coronavirus supplement of $550 per fortnight to new and existing jobseeker payment, youth allowance jobseeker, parenting payment, farm household allowance and special benefit recipients. For the period of the coronavirus supplement, there will be expanded access to these income support payments and faster claims processing.
- cashflow assistance to help small and medium size businesses to stay in business, keep their employees and retain apprentices and trainees.
- investment support to 3½ million eligible businesses employing 9.7 million Australians, by lifting the instant asset write-off threshold to $150,000 until 30 June 2020, and by providing a 15-month investment incentive by accelerating depreciation reductions; and
- support for regions and communities that have been disproportionately affected, including those heavily reliant on industries such as tourism, agriculture and education. This is a decisive response and it will put Australia in the strongest possible position to secure our economy and return to strong and inclusive growth once the health challenge of the coronavirus has been overcome.
Enhancing the instant asset write-off: the government will provide immediate additional support for business investment by enhancing the instant asset write-off for small and medium-sized businesses. The threshold for eligible assets will increase from $30,000 to $150,000, allowing businesses to immediately deduct purchases of eligible assets each costing less than $150,000. To be eligible, assets need to be first used or installed ready for use in the period to 30 June 2021. Access to the instant asset write-off will also be expanded during this period to include all businesses with an aggregated annual turnover of less than $500 million, up from $50 million. On top of the 3½ million Australian businesses that were already able to access the instant asset write off, as a result of these changes, an additional 5,300 businesses which employ around 1.9 million Australians will be able to benefit from the instant asset write-off.
Backing business investment: we will provide support for business investment by allowing businesses with an annual aggregated turnover of less than $500 million to access accelerated depreciation reductions. Eligible businesses will be able to bring forward depreciations reductions of 50 per cent of the cost of certain assets they have committed to purchase after 12 March this year, if they are first used or installed by 30 June 2020. Around 3½ million businesses which employ 9.7 million people are eligible to benefit from this measure. The government will support employers to manage cash flow challenges and help businesses and not-for-profits, including charities, retain their employees and keep operating by providing a cash boost payment. This measure will provide at least $20,000 and up to $100,000 back to eligible businesses and not-for-profits, including charities. This will benefit around 690,000 businesses employing around 7.8 million people. Around 30,000 not-for-profits will also benefit.
We will also provide two rounds of economic support payments. In each round, the payment will be $750 for each eligible individual. The first economic support payment will be made to certain recipients of social security and veterans payments, farm household allowance, and holders of certain concession cards eligible in respect of a day in the test period from 12 March 2020 to 13 April 2020 to assist them in a time of economic uncertainty during the coronavirus outbreak. The second round of economic support payments will be delivered to a subcohort of those payment groups who received the first economic support payment. This second payment will not be paid to recipients of the coronavirus supplement on the test date. All other payment groups who are eligible for the first payment will be eligible for the second economic support payment providing they would ordinarily be residing in Australia in respect of the test date of 10 July 2020.
We're also amending the Biosecurity Act 2015 to allow for the Director of Human Biosecurity to delegate any or all of their functions or powers concerning human biosecurity control orders to senior executive officers of the Department of Health who are also human biosecurity officers. This will ensure some of the Commonwealth's key powers for responding to biosecurity threats, including the human biosecurity control order, can be implemented in an efficient manner should it become necessary to use them. It is vitally important that we have a range of qualified medical personnel able to conduct administrative processes such as reviewing control orders to ensure they're being used in a way that is proportionate to the public health risk.
The Great Barrier Reef Marine Park Regulations 2019 will also be amended to temporarily waive the environmental management charge for the next nine months. This charge mainly applies to tourism activities, and this waiver is intended to relieve the cost pressures on tourist program operators in the Great Barrier Reef Marine Park. A number of national park entry fees will also be waived administratively by the Director of National Parks.
The government will also support jobs for apprentices and trainees through this period of economic challenge by providing $1.3 billion for up to 70,000 small businesses, including those using a group training organisation, to support the retention of around 117,000 apprentices and trainees. This support, which will be in the form of a wage subsidy of 50 per cent for apprentices and trainees, will help ensure the continuing development of the skilled workforce that Australia's employers need.
Australia's aviation industry has been among the first sectors affected by the coronavirus outbreak. The sector is facing an unprecedented and sustained period of falling international and domestic aviation demand. The government will provide $715 million to support the aviation industry as it grapples with these challenges. The bill will refund aviation fuel excise and refund or waive charges levied by Air Services Australia on domestic airline operations. The bill also includes funding to reimburse domestic and regional aviation security charges. The provisions will apply to charges paid by domestic airlines since 1 February 2020, providing an upfront benefit of $159 million to our airlines to provide immediate relief.
The government will amend the A New Tax System (Family Assistance) Act 1999 and A New Tax System (Family Assistance) (Administration) Act 1999 to allocate extra allowable absence days for child care in addition to the current 42 days. The Minister for Education will have the power to prescribe where a family does not need to provide evidence in relation to additional absences related to coronavirus. The government is also waiving the current obligation of childcare services to enforce payment of gap fees for a particular event or circumstance and the period specified in a minister's rule. This will enable services to provide relief to families where exceptional circumstances require it for limited periods.
We are giving retirees more control over their superannuation. This bill also adjusts the superannuation minimum drawdown rates, reducing them by 50 per cent for the 2019-20 and 2020-21 income years. These rates prescribe the amount that an individual in the retirement phase must withdraw from an account based pension or similar product, depending on their age. This measure will help alleviate concerns of retirees regarding selling assets in a loss position, giving them greater control over their capital during a time of increased market volatility and assisting with retirees' confidence in the economy.
We're providing a temporary jobseeker payment and coronavirus supplement. Additional temporary financial support will be provided to working-age income support recipients through a coronavirus supplement of $550 per fortnight. This measure will provide streamlined access to income support and extended eligibility to income support payments for people whose income is significantly reduced by the economic impact of the coronavirus. The Minister for Families and Social Services will have the power to extend the coronavirus supplement in whole or in part to other categories of recipients of social services payments. This measure will also create a new category of crisis payment where a person will qualify for payments if there is a national health emergency such as the coronavirus and delay commencement of the simplifying income reporting act for up to a year to ensure Services Australia can focus on assisting people who require income support as a result of the coronavirus.
We're providing more flexibility in the Corporations Act. Treasury ministers will be given a time limited instrument-making power in the Corporations Act to grant time limited relief from regulatory requirements where these will interfere with the ability of companies to manage their businesses through the impacts of the coronavirus. Each instrument would be effective for up to six months from when the instrument is created.
We're providing additional assistance to business to trade through the crisis. The government will also provide a safety net for businesses to allow them to get through a temporary period of insolvency and recover when economic growth picks up. To do this, we are amending the Corporations Act to temporarily increase the threshold for a creditor to initiate bankruptcy proceedings, to increase the time period for debtors to respond to a bankruptcy notice and to extend the period of protection a debtor receives after making a declaration or intention to present a debtor's petition. There will also be temporary relief for directors from any personal liability for trading while insolvent. For owners or directors of a business that are currently struggling due to the coronavirus, the Australian Taxation Office will tailor solutions for their circumstances, including temporary reduction of payments or deferrals or withholding enforcement actions, including director penalty notices and wind-ups. This will provide directors with additional confidence to continue to trade through this difficult period.
We're allowing early release of superannuation because this is the peoples' money. We're establishing a new temporary compassionate ground of early release of superannuation for individuals and sole traders impacted by the economic consequences of the coronavirus. This will allow impacted individuals to access up to $10,000 of their superannuation, tax free in 2019-20, and up to a further $10,000 in 2021. Applications must be made within six months of royal assent of this legislation and will be able to be made online via the myGov portal.
This bill amends the Medicare Levy Act 1986 and the A New Tax System (Medicare Levy Surcharge - Fringe Benefits) Act 1999, to increase the Medicare levy low-income thresholds, with increases for singles, families, seniors and pensioners to ensure these remain in line with changes to the consumer price index.
During this time of uncertainty, it's extremely difficult to formulate reliable economic and fiscal estimates over the next few months. In line with the government's decision to postpone the budget until later this year, the next intergenerational report will now be released in mid-2021 to ensure there is adequate time to produce long-term projections that are based on robust budget estimates. The government remains committed to producing an intergenerational report that assesses the long-term sustainability of government's finances. The charter will continue to require five-year updates of the IGR from 2021.
Over the coming months, this parliament will quite rightly be focused on responding to the needs of the Australian community. During the next six months, a number of acts passed by this parliament and a large number of legislative instruments are scheduled to sunset. Where an act or legislative instrument is scheduled to sunset on or before 15 October 2020, the bill will allow the minister responsible for the act or instrument to defer the sunset day by up to six months. This will ensure no gaps occur in our laws during this critical period.
The government understands the need to move quickly to provide support and relief to small and medium-sized enterprises that are under incredible pressure and play such an integral role in the Australian economy. We are providing a guarantee for new short-term loans issued by the authorised deposit-taking institutions, the ADIs, and non-ADI lenders to support SMEs to cover immediate cashflow needs in response to the economic crisis associated with the coronavirus pandemic. Importantly, the guarantee will apply to eligible loans made after the government's announcement of this measure, regardless of whether the loans were made before or after the commencement of the bill. There is an overall cap of $20 billion on the appropriation for meeting liabilities under the guarantee. In the event of a loan default under this measure, government will compensate the lender for an agreed proportion of the losses.
We're also providing additional support for Australia's small and medium-sized enterprises. The Commonwealth will be authorised to participate in forming and acquiring shares in or debentures of the Australian Business Growth Fund and appropriates $100 million for that purpose. The Australian Business Growth Fund's purpose will be to offer growing established companies patient equity capital and strategic support to assist them to reach their growth potential. Business seeking support can be from across Australia and from a range of industries. Established Australian businesses will be eligible for long-term equity capital investments between $5 million and $15 million where they can demonstrate three years of revenue growth and profitability and a clear growth vision.
We are providing support for severely affected regions. This response package will appropriate a further $1 billion from consolidated revenue funds to support those sectors, regions and communities that have been disproportionately affected by the economic effects of the coronavirus. Further plans and measures to support recovery will be designed and delivered in partnership with the affected industries and communities through the funding allocated in this package.
The government is also establishing the $15 billion Structured Finance Support Coronavirus Economic Response Fund and the Structured Finance Support Coronavirus Economic Response Fund Special Account. The fund will ensure continued access to funding markets impacted by the economic effects of the coronavirus pandemic and promote competition and consumer and business lending markets. In particular, this will ensure that smaller lenders can maintain access to funding by the government making targeted investments in structured finance markets. To fund this package, the government is appropriating the necessary funds from the Consolidated Revenue Fund. The details of the measures contained in the package are set out in the explanatory memorandum to the bills.
These are extraordinary times demanding extraordinary measures, and I thank the opposition for facilitating the passage of these bills through the parliament. Led by our Prime Minister, with strength and courage, we face a global challenge like this country has never faced before. But, by working together, we will get to the other side of this and we will bounce back as a nation stronger than ever. We know there will be more to do and we will continue to do it to support every Australian in the challenges they face in the period ahead. I commend these bills to the House.
The DEPUTY SPEAKER ( Mr Zimmerman ): I thank the Treasurer and, in accordance with the resolution passed earlier, the question is that these bills be now read a second time. I call the member for Rankin.