Australians caught in lockdowns to get $500 a week if they meet strict rules

Australians who lose incomes during lockdowns will gain access to a $500 disaster payment for every week they need help under a federal scheme that will start in Victoria and be offered to any state and territory that has to shut down communities during the pandemic.

Prime Minister Scott Morrison will take the scheme to state and territory leaders on Friday at a national cabinet meeting that is likely to formalise the payment, which will be worth $325 for people who worked less than 20 hours before a lockdown.

Prime Minister Scott Morrison says state governments want to retain control over lockdowns.Credit: Alex Ellinghausen

But the new cash grant comes with a demand for federal control over who is eligible, setting up tensions between Canberra and the states over how to define the “hotspots” where residents and workers qualify for the Temporary COVID Disaster Payment.

Mr Morrison said he wanted the Commonwealth chief medical officer to decide the hotspots rather than leaving this to state and territory government decisions on the suburbs, cities or entire regions that must go into lockdown.

On Thursday night veteran federal Liberal backbencher Russell Broadbent hit out at his own government’s compensation package, arguing it did nothing for regional Victorian businesses who are hit with closures or harsh restrictions but not in a defined federal hotspot.

Russell Broadbent said the package is “not logical or fair for country people affected by the lockdown”.Credit: Alex Ellinghausen

“It’s not logical or fair for country people affected by the lockdown,” Mr Broadbent told The Age and The Sydney Morning Herald.

“Why punish people twice when they get caught up in a lockdown not of their own making and now excluded from help because the federal government because you are not in a hotspot.

“Federal support should be available to all affected Australians that fit the criteria. This divides city and country, one Australian against another. I speak for regional people.”

Nationals MP Anne Webster, whose electorate of Mallee includes regional cities such as Mildura, said she knew of a business owner who was losing $25,000 per week but whose workers could not qualify for the disaster payment.

“The frustrating thing is we have no COVID here ... yet the restrictions are being maintained by the state government,” Dr Webster said.

“I feel like regional Victoria is being abandoned by the state government. It’s outrageous that our communities are held to ransom for an outbreak in Melbourne.”

While Mr Morrison said it was up to states and territories to decide their lockdowns, he said the Commonwealth had the right to decide who received money.

“We have no part in the decisions made by state governments and they can choose to do, as they remind me regularly, what they like to do, when they like to do and for how long they like to do it,” he said.

“Where it comes to federal taxpayer money in place, we will be relying on the medical advice of the Chief Medical Officer.”

Victorians will be able to apply for the Temporary COVID Disaster Payment from Tuesday and must “self-declare” their eligibility for the grant, which will only be available if a lockdown lasts longer than one week.

The new payment will be $500 a week for people who normally work more than 20 hours a week and $325 a week for people who normally do less than 20 hours.

It will only be available for people who cannot work and have less than $10,000 in liquid assets, with the government considering cash. It cannot be combined with other welfare or coronavirus support payments from the federal government.

The payment will only go to people who are at least 17 years of age and who are Australian citizens, residents or visa holders with a right to work here.

The government will not expect people to use their annual leave during the lockdown, but wants them to try first for help from their employers such as sick leave. The money will come with an understanding there may be “retrospective compliance activity” to check that applicants are being honest.

The Prime Minister stressed a lockdown alone would not be enough to trigger the federal money, raising the prospect that a state could go into lockdown without its citizens getting federal money. To receive the payment, people must declare they have lost income and must live or work in a declared hotspot under a federal coronavirus hotspot definition.

Mr Morrison said Chief Medical Officer Paul Kelly is expected to declare Greater Melbourne a hotspot for the next seven days.

Details of who will pay for the support will be finalised in tomorrow’s national cabinet meeting, but the Prime Minister said either the Commonwealth will cover wages support for workers while the relevant state or territory provides money to businesses, or they can equally share the cost for both.

“What matters is that businesses get the support they need and households get the support they need and the politicians don’t need to have a discussion in public about how that is going to get done,” Mr Morrison says.

The Victorian government said states should be responsible for handling business support, while income support was the responsibility of the Commonwealth.

Treasurer Josh Frydenberg said the payment would cost $50 million each week for every group of 100,000 people on the payment.

The Australian Council of Social Service called on Wednesday for the government to use disaster payments to help Victorians in need, but it raised the idea of one-off grants worth as much as $3,000.

Australian Industry Group chief Innes Willox welcomed the payment but questioned whether federal and state leaders could have foreseen the lockdown problem rather than arguing this week over which level of government should offer income support.

“I think this is a question we all have to ask about how effective national cabinet has been around these sort of broader issues, around how to handle the pandemic and its consequences,” Mr Willox told ABC News.

“I think this is a real issue and we’ve got to say what does national cabinet do, what does it talk about and does it look at these long-term issues? You would hope they would have worked out a system beforehand before it got to this.”

Greens leader Adam Bandt said the $500 payment was less than the minimum wage, below the poverty line and would have to last many people two weeks because it would only start after the first week of the Victorian lockdown.

Labor deputy leader Richard Marles criticised Mr Morrison for taking too long to decide the payment when the Victorian government had asked for help last Sunday.

“The Prime Minister has been dragged kicking and screaming for his announcement,” Mr Marles said.

“The Prime Minister is continually playing catch up footy. Scott Morrison is always about the politics and as a result, events constantly lead the Prime Minister and not the other way around.”

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