Prime Minister Scott Morrison has flagged another round of stimulus measures ahead of the “fiscal cliff” we risk toppling over as Victoria’s second wave threatens a national recovery.
The PM and Treasury are pondering a new version of JobKeeper to run past the initial September finish date and may bring forward tax cuts and the possible extension of insolvency protections, reports Investor Daily.
“There will be a further phase of how we continue to provide support … in industries or in businesses or parts of the country that are more affected by COVID than others, then where there is the need, then there will continue to be support,” said Mr Morrison.
“And so this is about tailoring a national program to provide support where the support is needed.”
Measures are likely to be extended for the tourism sector and airlines, which have seen massive job losses due to restrictions on both international and domestic travel.
And although Victorian businesses will suffer from the lockdown extension for another six weeks, the PM confirmed that new stimulus measures will not be limited exclusively to Victorians.
“We’re running a national programme of support,” he said.
“That national programme of support will give people in the same areas of need the same support. It’s not a state-based programme or anything like that, in the same way it has operated up until now. It’s been something that has operated nationally and something that has been directed towards businesses that have had that fall-off in turnover and to their employees, and similarly JobSeeker is applied across the nation.”
Leading economists have long been warning of ending stimulus too early.
“While government has rolled out significant stimulus to date, the fact that hidden unemployment is still substantial is in itself proof that the stimulus hasn’t been big enough to stop unemployment rising, and it’s concerning to hear talk about spending less in the second half of the year than in the first half,” Australia Institute chief economist Dr Richard Denniss told the Senate.
“The only thing keeping the economy afloat is the increase in government spending, yet the government is promising to cut that in the second half of the year – the consequences of that are disastrous.”
Federal treasurer Josh Frydenberg also flagged more income support beyond September.
The first thing to say is that the JobSeeker and JobKeeper programs are already legislated to the end of September. So, even with the six-week lockdown [in Victoria] announced by Premier Andrews, that takes it out to the end of August,’’ said Mr Frydenberg.
But after that, there’s going to be that really awkward and tough reopening measures again, which might last a couple of months past that.
Yes, and there’s going to be another phase of income support. The details of which will be announced on July 23. We recognise that some sectors are going to recover more slowly than others. For example, the tourism sector as a result of the international borders being closed. We’ve announced a number of sector-wide specific packages for housing, for the arts, for tourism.”
Many major banks have also announced further support measures beyond the first round of assistance, extending loan holidays and creating flexibility around debt repayments.
“Those who are able to repay their loans will resume doing so, which is in the best interests of those customers and allows support to be directed to those who need it,” said Australian Banking Association CEO Anna Bligh.
“Encouragingly, many customers have already chosen to resume making repayments… This next phase of bank support will avoid a ‘cliff’ for customers in September and give them the breathing space they need to work with their bank and get back on their feet financially.”
Do you or does someone you know need more help beyond the initial September cessation of support?
If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.