Support measures costly but needed for Delta

When Victoria was forced back into lockdown for a third time in June this year, Scott Morrison was quick to point out that the grim events unfolding in Melbourne could be happening anywhere. As Greater Sydney digs in for what is shaping up to be a protracted lockdown, the Prime Minister’s words have proved to be prophetic and the federal government is again being called to provide emergency financial assistance. There is a strong national interest in the financial rescue measures announced on Tuesday. NSW has been the nation’s economic engine throughout the pandemic recovery. Before the latest Covid-19 outbreak, job numbers and economic activity were at a higher level than before the pandemic hit. As was the case with the national emergency financial measures, the challenge with NSW is to protect viable businesses and families so they quickly can return to financial health when the lockdown ends.

The Morrison government has resisted calls for the reintroduction of JobKeeper but, in co-operation with the NSW government, has outlined a series of measures that will scale up according to the length of the lockdown. The financial support measures will apply to other states faced with a protracted lockdown and should be considered a national response. “When situations get like this, it is in the national interest to ensure lockdown in NSW will be effective,” Mr Morrison said.

Assistance measures include rent relief and wage subsidies. Businesses that have experienced a 30 per cent decline in turnover will receive cash payments equal to 40 per cent of NSW payroll payments. In exchange, companies must agree to maintain staff numbers. For individuals, payments will ramp up across a period of four weeks to a maximum of $600 a week. People will be eligible for the payment even if they are still working, provided they have lost more than eight hours or a full day of work. The federal government will fund 50 per cent of the cost of the business support payments, with the NSW government to fund the rest.

Given the strident criticisms that have been made of Victoria’s pandemic response, it is inevitable that the Morrison government has faced accusations of double standards given its treatment of NSW, including by Victorian Premier Daniel Andrews. Old arguments have resurfaced that the federal government was too quick to end the original JobKeeper program, despite the strength of the economic recovery since it was stopped. Josh Frydenberg dealt directly with both accusations. The federal Treasurer said conditions with the national lockdown and the current situation in NSW were vastly different. “Since it (JobKeeper) came to an end the unemployment rate has fallen,” Mr Frydenberg said. “That was the right program at the time but we have now transitioned to a different response.” He said the situations in NSW and Victoria were “chalk and cheese”, with Victoria experiencing repeated lockdowns. “If you compare the performance of NSW to other states, they have avoided lockdowns despite having outbreaks,” he said. The payments being offered to NSW are no different to those paid to Victoria.

NSW Premier Gladys Berejiklian said the current lockdown inevitably would extend beyond Friday. She said the state’s public health response was very different to other outbreaks because of the significant challenges posed by the Delta variant. Business groups have said the new financial support measures are a critical lifeline for thousands of workers and their employers.

The big challenge remains vaccine rollout, where the federal government continues to face heavy criticism. Opposition Treasury spokesman Jim Chalmers said the nation’s economic recovery was being held hostage by Mr Morrison’s failure to procure a sufficient supply of vaccines, which meant the country was “locking down while other countries are opening up”. No mention was made of Australia’s much better health and economic performance relative to countries now opening up with case numbers well in excess of those being experienced here.

Mr Morrison said the government would continue to move as quickly as possible with the vaccination program. He said by the end of the year everybody who sought a vaccine would have been offered one. We agree with Business Council of Australia chief executive Jennifer Westacott that vaccination is the vital element and our ticket back to normality. The latest economic rescue plan is timely and well considered, but it is also hugely expensive and can be only a stopgap measure. The government must use the difficult experience of the Sydney lockdown to break residual vaccine hesitancy in the community as it works to speed up the vaccine rollout to put an end to restrictions.