Under the measure, businesses with turnovers up to $50 million will be eligible for tax-free payments of up to $25,000.

To ensure integrity, businesses which pay the Australian Tax Office income tax on their employees’ salary and wages either quarterly or monthly will receive a payment equal to 50 per cent of the amount withheld, up to a maximum of $25,000.

Eligible businesses that pay salary and wages but are not required to withhold tax will receive a minimum payment of $2,000.

The government anticipates the measure will benefit around 690,000 businesses employing around 7.8 million people.

The money will be available over the four months of March, April, May and June and the maximum a business will be entitled to across that period is $25,000.

Another measure will dedicate $1.3 billion over this and the next financial year to wage subsidies for employers to save the jobs of 120,000 apprentices at risk of lay-off.

The package will offer up to $7000 each quarter in wage assistance for each apprentice so small businesses can retain existing apprentices and trainees, or re-employ apprentices and trainees who lose their positions from a small business because of the coronavirus downturn.


Where a small business can’t afford to hold on to an apprentice, the subsidy will be available to a new employer.

Business boost

In a bid to turbocharge business investment, another $700 million will be used to significantly expand the instant asset write-off scheme, which will operate from today until July 1, in an effort to stop the June quarter contracting and causing a recession.

Presently under the scheme, businesses with turnovers of up to $50 million can instantly write off assets valued at up to $30,000.

Under the changes to be announced today, the turnover threshold for eligible businesses will increase tenfold to $500 million, while the asset value which can be written of will escalate to $150,000. This will cover 3.5 million businesses.

This expansion will capture medium and many large businesses but not cover corporates, who want access to similar deductions via a business investment allowance.

It is unclear whether such a scheme will be announced today, when other measures will also be unveiled, but the expectation among the big business sector was there would be something in the May budget aimed at driving growth as the economy emerges from the crisis.


Sources said the coronavirus package would be worth about $17 billion.

The government will be hoping today's announcement buoys the share market, which fell into bear territory yesterday, a 20 per cent drop since its February peak . The S &P/ASX 200 Index closed down 3.6 per cent to 5725.9 points.

Bank stocks again weighed on the market, with financial stocks down 5.26 per cent for the day.

Global markets are anxiously awaiting details of the US fiscal stimulus, with possible payroll tax relief and assistance for coronavirus-affected sectors, promised by President Donald Trump. The economic relief package had been stalled in Washington by reluctant Republicans.

Virus rout

The global coronavirus death toll has now passed 4000 with the number of confirmed cases nearing 120,000. Australia has 120 confirmed cases.

The virus outbreak and rout in global markets pushed Australian consumer sentiment to its lowest point in five years as measured by the Westpac-Melbourne Institute Index of Consumer Sentiment.

As the crisis unfolded, the government was initially reluctant to include cash payments as part of the package, saying the economic slump caused by the virus outbreak was one of supply, not demands.


But on Wednesday, Mr Morrison effectively confirmed there would be payments to low-income households when he moderated his criticism of the Rudd government's "cash splash'' as part of its response to the global financial crisis.

Mr Morrison noted that in late 2008 the then-Coalition opposition supported the first wave of stimulus, which had boosted welfare payments.

He said it was the second stimulus package, worth $42 billion, that the Coalition opposed and that included $900 cash cheques as well as the pink batts and school halls scheme.

"There were two tranches to that stimulus at that time. The first one acted and worked through the existing payment mechanisms, and that was able to be put through fairly quickly,'' Mr Morrison said.

"The Coalition supported those measures at that time. So, you know, these are measures that the government has been looking closely at.

"I have said ... that we need to address the demand side and supply side.

"What the package is all about is keeping Australians in jobs, keeping business in business and ensuring that the Australian economy and the businesses that form that economy bounce back stronger on the other side of this."


Support from Labor

Labor leader Anthony Albanese told the The Australian Financial Review Business Summit the opposition would deal constructively with any necessary legislation, after pointing out how the Coalition tried to block the Rudd government's second stimulus package.

"Labor will continue to be constructive and provide expedited support through the Parliament for any reasonable measure that restores confidence, increases economic activity and keeps people in jobs,'' he said.

Australia's top corporate leaders used the summit to call for longer-term structural changes to boost their investment and drive productivity, and help the economy emerge from the crisis.

They advocated a business investment allowance, which the government flagged last year, as well as corporate tax cuts and red tape reduction.