$1.7 billion survival package to save Victorian businesses
Small businesses will start to receive cash refunds from as early as next week after Daniel Andrews unvielied a survival package for employers doing it tough during the coronavirus crisis. Here’s what else you need to know.
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Small businesses will get cash refunds on their payroll tax bills and a six-month reprieve on their loans to prevent them going to the wall during the coronavirus crisis.
More than $550 million in payroll tax already paid by 24,000 Victorian small businesses, which employ about 400,000 workers, will be sent back to them from next Friday.
The cash injection, applying to businesses with a payroll of less than $3 million, will provide most with about $23,000 in immediate support, with some to receive up to $113,975.
It is part of a $1.7 billion economic survival package unveiled by Premier Daniel Andrews today, with further state government support also in the works.
Mr Andrews will also put $500 million into creating a “Working for Victoria” fund to get people who have lost their jobs back into the workforce.
“We have an enormous amount of virus related work to be done, whether it’s cleaning trams, delivering support packages — there are many tasks that will need to be performed for all Victorians and it just makes sense to re-employ people who are out of work,” he said.
Mr Andrews said his government had “taken the time to listen” to those in need.
“Now we’re taking unique and unprecedented action to help businesses and their workers through this crisis,” he said.
“The most important thing for businesses right now is cash to save them and their workers. This is all about helping businesses get to the other side of this crisis.”
The state government’s $1.7 billion plan comes on top of $537 million in immediate support to Victoria’s health system. The federal Budget has been delayed until October 6 because of the crisis.
Joanne Brewer’s little cafe down one of Melbourne’s laneways is usually buzzing on a weekend.
But yesterday, standing outside Issus cafe, she said she had never seen it so quiet in 13 years.
With fewer people dining out, the 47-year-old said she had been forced to cut back on staff and worried about how she would pay the rent.
“[This cafe] is my baby, it’s my home,” Ms Brewer said. “My son normally works here on a Saturday and he asked me today if he was working. I had to say ‘Baby, I’ve no work for you’. That’s my son.”
The cafe owner welcomed both the state and federal government business support initiatives, saying they would be a “big relief” for her and other struggling businesses.
“We really need it. It’ll be a big help,” Ms Brewer said.
To comply with social distancing rules, Ms Brewer has removed several tables from the cafe to ensure there’s enough space between customers. Hand sanitiser is also on offer.
Coburg hairdresser Rima Kaake welcomed any move to boost small businesses during this “unpredictable” time.
The owner of Vuda Hair said many people were worried about what was going to happen with their day-to-day income.
A stimulus package would be “extremely beneficial” for the business’s long-term prospects, she said.
Ms Kaake said her salon was not busy last week as the virus took hold, but she had experienced a boom of panic bookings this week.
“We saw a real 360 this week where we have been extremely busy doing late nights because everyone is now looking to get a haircut before a potential lockdown,” she said.
All salon staff have been extra cautious, sterilising scissors and other appliances and limiting customers throughout the day.
“We want to keep everyone calm and comfortable when they come in to the salon,” Ms Kaake said. “We have been keeping the metre distance between clients and only allowing three in the salon at once.”
BIG BANKS FREEZE LOAN REPAYMENTS
Amid fears of a recession, Australia’s big banks yesterday stepped up to freeze loan repayments on $100 billion of small business borrowing.
Australian Banking Association boss Anna Bligh said the move could put $8 billion back in the pockets of small businesses.
“This is a multibillion-dollar shot in the arm for small businesses when they need it the most,” Ms Bligh said.
Fast-tracked processes are being put in place and the deferrals could be available as soon as Monday.
“Businesses, I know, are doing it very tough,” she said.
“They can rest assured that banks have got their back.”
Federal Treasurer Josh Frydenberg said the banks were “playing their part in Team Australia”.
“Their decision to defer payments by small businesses for six months will be a substantial boost to confidence and the spirit of millions of Australian small businesses. It’s a game changer,” he said.
Mr Frydenberg and Prime Minister Scott Morrison are expected to unveil billions of dollars in economic support tomorrow, with the Treasurer flagging the package will include cutting red tape to help businesses access capital quickly.
It follows a co-ordinated move by Reserve Bank and the federal government to fire what Mr Frydenberg described as a “$105 billion bazooka” to free up cheaper cash for banks to lend to businesses.
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