Over the past two weeks the Government has announced two economic stimulus packages to cushion the economic impact of the Coronavirus.
A total of $189 billion is being injected into the economy by all arms of Government in order to keep Australians in work and businesses in business.
This includes $17.6 billion for the Government’s first economic stimulus package, $90 billion from the RBA and $15 billion from the Government to deliver easier access to finance, and $66.1 billion in yesterday’s economic support package.
There are some important superannuation measures that you should be aware of:

An amnesty is now on for employers in relation to unpaid employee super entitlements from 1 July 1992 to 1 January 2018. There are certain conditions which have to be met for employers to qualify. The amnesty will allow employers to self-correct super guarantee underpayments without incurring additional penalties that would normally apply. During the amnesty period, employers can also claim a tax deduction for payments of SG charge or contributions. The amnesty will end on 7 September 2020 at which time the ATO is set to take a tougher stance on SG underpayments. The super guarantee amnesty Bill has finally received Royal Assent which means that the amnesty for employers to come forward to declare any super guarantee (SG) shortfalls will run from 24 May 2018 to 7 September 2020. Under the super guarantee amnesty, employers can self-correct SG underpayments with reduced penalties, and the employer can also claim a tax deduction for payments of SG charge or contributions made during the amnesty period.

Ensuring your affairs are in order before your passing is an integral part of estate planning. Given this, it’s vital to understand that your super death benefit isn’t necessarily distributed via your will. For example, your super death benefit may be paid to your legal personal representative (the executor or administrator of your estate) when: 1. You elect your legal personal representative through a super death benefit nomination. 2. The trustee of your super fund, under certain circumstances, uses their discretion to pay it to your legal personal representative. 3. You have not made a super death benefit nomination, and the trust deed for your super fund stipulates that in the event you have made no nomination, benefits are to be paid to your legal personal representative. Whether you wish your super death benefit to be paid to your estate, directly to your dependants, or as a blend of both, it’s important that your super death benefit nomination is valid, up-to-date, and reflects your wishes.

In terms of funding our lifestyle expenses and accumulating wealth, one of the biggest resources is our capacity to earn an income. Although, this income-earning capacity can sometimes be taken for granted. When we are feeling fit and healthy, we may think we are less likely to experience an unexpected financially adverse event, than others. For example, being unable to work for a period due to a sickness or injury: In our working life, we have a 60% chance of being disabled for 1 month, and a 33% chance of being disabled for more than 3 months*. Coupled with this, if we are off work for: ‘20 days, the chance of ever getting back to work is 70%. 45 days, the chance of ever getting back to work is 50%. 70 days, the chance of ever getting back to work is 35%’^. Importantly, this ‘optimism bias’ can affect whether or not we put in place a safety net, for example, insurance, to protect us from such an event. As it stands, 33% of Australian workers have income protection insurance.

The coronavirus has been biting into global financial markets and in an effort to contain the fall-out to the local economy, the government has released a stimulus package worth $17.6bn targeted at businesses, pensioners, and those in impacted sectors, regions and communities. It is expected that the package will provide direct support for up to 6.5m individuals and 3.5m businesses. In addition, tax administrative relief will also be provided including deferring tax payments up to 4 months, which is similar to the relief provided following the 2019-20 bushfires. In an effort to combat the economic effects of the global coronavirus pandemic, the government has released an $17.6bn stimulus package which is expected to provide direct support for up to 6.5m individuals and 3.5m businesses. The package includes business investment initiatives, cash flow assistance payments to SMEs, household stimulus payments, support for impacted sectors, regions and communities, as well as tax administration relief.

While many trustees will know that self-managed super funds (SMSFs) are required to prepare and implement an investment strategy, what they may not know is that specific factors have to be considered in forming the investment strategy including the risk of inadequate diversification. It is an area where the ATO has released further guidance on after finding that a significant proportion of SMSFs were holding 90% or more of their retirement savings in one asset or a single asset class (typically property). The ATO has released further guidance on investment strategy requirements for trustees of self-managed superannuation funds (SMSFs). The guidance comes on the heels of ATO contacting 17,700 SMSFs in late 2019 where the SMSF annual return data indicated that they may be holding 90% or more of their retirement savings in one asset or a single asset class.

The Morrison Government has today announced a $17.6 billion economic plan to keep Australians in jobs, keep businesses in business and support households and the Australian economy as the world deals with the significant challenges posed by the spread of the coronavirus.

Our targeted stimulus package is focused on keeping Australians in jobs and helping small and medium sized businesses to stay in business.

The package has four parts …

Over the last few days we have seen a significant market sell-off – a degree not seen since the Global Financial Crisis of 2008. The core triggers for these event have been first and foremost the Corona virus (COVID-19) outbreak, and more recently the OPEC / Russian initiated oil ‘price war’ that has seen oil prices fall at a rate not seen since 2015.