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Second round of income support payments flow

National

Millions of Australians on pensions and low incomes are about to get cash hits from the government, which it hopes will give another boost to the coronavirus-hit economy.

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The second round of $750 payments for pensioners, veterans and carers will start going into peoples’ bank accounts from Monday.

The payment will be made to about five million Australians at a cost of $3.8 billion, as part of support measures in the face of the coronavirus pandemic.

Treasurer Josh Frydenberg anticipates many will spend the money on everyday expenses like groceries, rent and bills.

“This will come at an important time for many people being challenged by the economic consequences of COVID-19,” he told reporters on Monday.

A record number of people have already lodged their tax returns and will receive any refund owed from this week.

The government anticipates more than 10 million people earning under $126,000 will get a tax break of up to $1080 in the second year of a special offset.

“That’s a good cash support into the economy at a time when it’s doing it tough and that will be good news for small businesses,” Prime Minister Scott Morrison told 2GB radio.

Frydenberg said the number of people getting the tax offset could increase if those who have lost jobs or part of their income because of coronavirus drop into lower tax brackets.

The government is considering bringing forward the next stage of its already legislated tax cuts, but won’t reveal its decision until the October 6 budget.

The treasurer will outline the next phase of coronavirus support measures in an economic update on July 23, including the fate of the JobKeeper wage subsidy and the enhanced JobSeeker dole payment which are legislated to end in September.

He acknowledged the return to lockdowns in Melbourne would be “harsh on businesses and households”.

“Our announcements on the 23rd will take into account the Victorian circumstances and that Victorians, like those in the other parts of the country who are hurting through COVID, will continue to benefit from the government’s support,” Frydenberg said.

“We’ve gone for a national approach as opposed to state-specific approaches.”

The official unemployment rate is expected to rise from 7.1 per cent when June’s labour force figures are released on Thursday.

Frydenberg said the effective unemployment rate, after people working zero hours and those who had dropped out of the labour force were taken into account, was around 13.3 per cent.

-AAP

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