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A summary of the Australian Government’s COVID-19 stimulus

As we all come to terms with the short-term and unknown longer-term implications of the Coronavirus (COVID-19), and what a Stage 3 Lockdown could mean, the Federal and State Governments have been on the front foot announcing a series of measures to assist businesses and individuals during this difficult time. 

The swift reaction by hospitality and retail businesses of standing down or sacking workers within just a few days of self-isolation announcements was somewhat unexpected but evidence of the ‘everyone for themselves’ survival instinct that occurs in such uncertain times.

A summary of the major Australian Government policy announcements so far include:

Pension drawdown changes

The minimum pension drawdowns for 2019-20 and 2020-21 have been cut by 50%, as they were during the GFC. That means if you are under 65, you only need to draw 2% of your 1 July 2019 balance, or 2.5% if between 65-74. The same discount applies for each of the other age brackets.

ATO tax & cash flow boost

For small businesses, the ATO is offering a Cash Flow Boost, by crediting any business activity (BAS) or PAYG amounts that are payable on a monthly or quarterly basis.

Specifically, businesses with turnover of less than $50m will not be required to pay PAYG to the ATO on behalf of their employees where it is less than $50,000. In fact, every business will be afforded a $10,000 credit whether they withhold tax or not. 

Early access to Super

The Federal Government is offering early access to superannuation under a loosening of the hardship provisions. This will allow those who are unemployed, eligible for job seeker payments or have been made redundant or lost working hours of 20% or more since 1 January 2020. It is limited to $10,000 this financial year and next. 

Victorian refunds of payroll tax

Closer to home, the Victorian State Revenue Office will be refunding payroll tax paid by businesses thus far in 2019-20 but only for those with payroll below $3.0m. This is a case refund and no further amounts will be payable for 2019-20 or the first quarter of 2020-21. 

It’s worth noting this is simply the first round of support measures. These come on top of the various actions taken by the Reserve Bank (RBA), which have allowed Commonwealth Bank (ASX: CBA), Westpac (ASX: WBC), NAB (ASX: NAB) and ANZ Banking Group (ASX: ANZ) to offer significant packages to their customers.

Both State and Federal Government’s appear acutely aware of the risk that mass unemployment would have for the future of the Australian economy. 

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The Golden Rules of Investing

We might be experts in retirement, but with combined financial advice experience of 35+ years, we’ve nearly seen it all. 

In mid-2023, our senior team at Wattle Partners Financial Planning put the finishing touches on a brand-new report “The Golden Rules of Investing“.

In this free report, we outline the key principles that determine all of the portfolio construction and investment decisions of Wattle Partners. Collated over decades, this paper should be seen as a work-in-progress, constantly under review in light of the ever-evolving nature of markets. 

You’ll find the free report on my Author page. Simply click the button below to view the Golden Rules.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

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Wattle Partners is a financial advice firm, servicing clients around Australia, specialising in retirement planning (pre and post retirement). 

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