$25,000 cash hand-outs for firms, subsidies for apprentices

It will also pay half the wages of 120,000 apprentices, including 2030 apprentices in Canberra.

The measures are part of a big front-loaded stimulus package announced as the coronavirus disrupts the economy to an extent not seen since the global financial crisis. More will be announced on Thursday.

The government will pay 50 per cent of apprentice wages, backdated to January 1, with the payment lasting to September 30.

The subsidy amounts to up to $21,000 for each apprentice across the nine months, with the measure costing $1.3 billion. While it is open to small businesses with fewer than 20 staff, the government says businesses of any size can access it if they pick up an out-of-work apprentice who has lost their job since March 1.

The separate tax-free cash grants for businesses, which the government is calling the "cash flow boost", will go to about 690,000 small and medium businesses, with the money starting to flow when they fill in their business activity statements for March.

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The government is tying the payments to the amount they spend on wages and salaries. Businesses will get a payment equal to 50 per cent of the tax due on their workers' pay packets each time they lodge their activity statement, whether that is monthly or quarterly, starting for the March quarter. Businesses that lodge a monthly statement will get three times the amount for March to make up for the two previous months.

In a third measure aimed at encouraging businesses to spend now on equipment, the government will expand its asset write-off scheme from March 12 for the next three-and-a-half months. Businesses will be able to claim an instant tax reduction for purchases worth up to $150,000, instead of the current $30,000 limit. The scheme has also been expanded from businesses with a turnover of up to $50 million to those with a turnover of up to $500 million.

The government says the $700 million write-off extension will allow businesses to buy cars, utes, trucks, harvesters, kitchen equipment and trades equipment, and because it's only available until July 1 it is designed to get them spending fast.

Prime Minister Scott Morrison says the stimulus will "supercharge" businesses and is focused on "keeping Australians in jobs and keeping businesses in business so we can bounce back strongly".

Treasurer Josh Frydenberg says the government had been "very careful not to repeat the mistakes of previous stimulus programs and not undermine the structural integrity of the budget".

The government has been anxious to ensure the money flows quickly and avoid having it caught up in long planning for infrastructure or other projects, and also to ensure it doesn't lock in future budgets to ongoing programs.

Treasury estimates the coronavirus will knock 0.5 points from Australia's GDP in the March quarter.

The government explained the "cash flow boost" with an example of a construction firm with eight workers, earning $89,730 a year, and which lodges returns monthly. In each of March, April and June, the firm reports withholding $13,806 in tax. For March, the business receives a grant of $20,709 (half of $13,806, times three to make up for the previous two months). And for April, the firm receives $4291, having reached the $25,000 cap. The 690,000 eligible businesses employ 7.8 million people.

On Wednesday Mr Morrison and Health Minister Greg Hunt announced a $2.4 million health spend, including $500 million into hospitals, an extra $615 million for testing, Medicare-funded telephone consultations for people aged over 70 and people with chronic conditions or in isolation; $200 million to fund 100 respiratory clinics around the country, $170 million for private pathology centres to test for coronavirus, $100 million for aged care, $30 million for research, and more money for the national medical stockpile.