Coronavirus: Business ‘will do its bit’ to keep economy afloat

Australia’s biggest employers have backed Scott Morrison’s call to support small businesses and keep workers in jobs.

Prime Minister Scott Morrison in Sydney on Tuesday. Picture: AAP

Australia’s biggest employers have backed Scott Morrison’s call to support small businesses and keep workers in jobs as the government’s budget razor gang signed off on a coronavirus stimulus package including support for at-risk sectors and measures to drive cashflow and investment.

Ahead of unveiling the package, estimated to be worth up to $10bn, the Prime Minister warned that all “buffers” available in the balance sheets of businesses, households and governments would be required to ensure Australi­a “bounces back stronger”.

The Business Council of Australia, Australian Industry Group and Australian Chamber of Commerc­e and Industry endorsed on Tuesday Mr Morrison’s push for the nation’s largest companies to do their part.

Ai Group chief executive Innes Willox said the longer the situation went on, the “more stresses everyone concerned will be under” but businesses would do what they “reasonably” could to support workers, suppliers and customers.

“COVID-19 has arrived at a time when the economic outlook has been deteriorating, business investment has disappointed and productivity growth has stalled, and it is critical that measures to boost business investment should feature prominently,” he said.

The Australian understands the stimulus package, which was presented to cabinet on Tuesday, will likely include one-off cash payments, tax relief, targeted suppor­t for small businesses and sectors including tourism. The measures could be announced as early as Thursday.

US President Donald Trump was also to unveil a major stimulus package in the US overnight focused­ on “very substantial” payroll tax relief.

Mr Morrison’s stimulus package is expected to include measures requiring legislation to pass through parliament, which has only one sitting week scheduled before the May 12 budget.

Opposition Treasury spokesman Jim Chalmers said Labor understood the economic impact of the virus would be “substantial” and was “inclined to do what we can to support the government”.

“Labor will do what it can to quickly pass any legislative changes that we support. That means getting draft legislation to us as soon as possible,” he said.

State and territory governments baulked on Tuesday at significant payroll tax relief.

With state budgets coming under pressure, South Australia is not expected to overhaul payroll tax and will instead focus on a capital works stimulus package.

The West Australian and Queensland governments have previously pledged minor relief and deferral of payroll tax for small and medium-sized businesses.

Mr Morrison said while the virus was “disrupting” global and domestic economies, it had a “fixed life”. “It will run its course. And it’s important we do things while we address this that does not impede a longer-term position,” he said. “In fact, use the time for training, skills development, investmen­t. I know that many companies will ask staff to take their built-up leave.”

BCA chief executive Jennifer Westacott told member companies the group was working with the government to ensure its response balanced the needs of “employees and customers” while keeping the “economy ticking over”.

Qantas Group chief executive Alan Joyce had earlier confirmed the carrier, a BCA member, would reduce its international flying ­capacity by almost a quarter over the next six months and that Qantas­ and Jetstar staff had been asked to take paid or unpaid leave.

“You will have seen the Prime Minister has today encouraged businesses — just as we did during the bushfire crisis and recovery — to pay small-business suppliers ­immediately and waive or delay debts for impacted small business customers,” Ms Westacott wrote.

She added that the BCA was ­receiving regular briefings from the government and would convene a teleconference with BCA members, deputy chief medical ­officer Paul Kelly and Safe Work Australia on Friday.

Mr Morrison urged big business to support workers and keep “them employed’.

“Wherever possible, support them — whether full-time, part-time or casual — including with paid leave if they need to take time off due to the virus,” he said. “We need you to support your small-business suppliers by paying them promptly. Pay your suppliers not just in time, but ahead of time.”

ACCI chief executive James Pearson said: “The Australian economy urgently needs targeted support for businesses and households mostly affected by the fallout from this health crisis.

“Flexibility and scalability of measures are critical. There is still a lot of uncertainty about how COVID-19 will impact on the economy and Australia is not isol­ated from international developments.”

Future Fund chairman Peter Costello said the government could be forced into a second round of stimulus measures in the budget if the coronavirus ­crisis hit the economy deeper than expected. “If in two months it’s still ­expanding, they will back up again in the budget, I think there’s a case for a measured response now, but wait and see what’s going to ­happen in May,” he said.