Coronavirus: Scott Morrison set to extend business package

Scott Morrison is drawing up plans to extend JobKeeper support beyond September for businesses most affected by the coronavirus pandemic.

Scott Morrison in Canberra on Wednesday. Picture: NCA NewsWire / Andrew Taylor

Scott Morrison is drawing up plans to extend JobKeeper support beyond September for businesses most affected by the coronavirus pandemic and is considering bringing forward personal income tax cuts to help grow the economy.

With more than five million Victorians beginning six weeks of lockdown following “particularly serious” outbreaks in Melbourne, the Prime Minister assured businesses that support would flow to “parts of the country that are more affected by COVID than others.”

Mr Morrison said he had been able to promise Victorian Premier Daniel Andrews that his state, which has been effectively cut off from the rest of Australia, would continue to receive federal government assistance.

“This is about tailoring a nat­ional program to provide support where support is needed,” he said.

“Because of what has happened in Victoria, obviously the need there will be far greater than previously and that need will be met.

“I have been consistent in ­saying there’ll be a further phase of support that goes beyond ­September.

“We’re all Melburnians now when it comes to the challenges we face.”

Josh Frydenberg confirmed on Wednesday that “another phase of income support” would be announced in his budget update in a fortnight and he is deciding whether to fast-track personal income tax cuts to “boost aggregate demand, boost consumption, put more money in people’s pockets”.

As the Treasurer prepares to unveil further details of government assistance beyond September 30 in an economic update on July 23, The Australian has learned industry groups believe a new $1100 fortnightly income support payment is being seriously considered.

Multiple industry groups told The Australian they believed the government was weighing up a replacement JobKeeper payment of about $1100 a fortnight — an amount that falls short of their preferred option to extend the $1500 wage subsidy payment for another six months.

There is also speculation that tougher eligibility requirements would force businesses to qualify for the new payments — possibly renamed to JobMaker — each month by showing their turnover had been reduced by 30 per cent on the same period last year.

Under the existing scheme, once a business is eligible for JobKeeper, its employees receive the $1500 payments for the duration of the program.

Government sources said no industry group had been given the details of Treasury’s JobKeeper review or what the next phase of support would be, noting decisions were still being made and taken.

As the nation confronts a second wave of coronavirus, analysis by the Parliamentary Budget Office showed the government spent $79.5bn in May — almost double its expenses during the same time last year — as JobKeeper was rolled out and cash flow boosts were delivered to business.

Government revenue in May plunged 18 per cent to $9.7bn because of lower company and personal income tax receipts during COVID-19; net debt was $464bn, $71bn higher than forecast last ­December.

The federal budget was in deficit by $64bn over the 11 months to the end of May compared with an expected $4bn.

With Victoria’s hotel quarantine program linked to corona­virus outbreaks in Melbourne and flights diverted from the city, Mr Morrison said he would ask nat­ional cabinet on Friday to slow the number of international arrivals coming to Australian airports.

He also said he would support premiers asking returned travellers to foot their own bills for the two weeks of hotel quarantine, which is currently being paid for by the states. “The states and terri­tories can send people a bill today if they wish … the commonwealth would have no objection to that,” he said.

“That would be a completely understandable proposition for people who have been away for some time and there’s been many opportunities for people to return. If they’re choosing to do so now, they have obviously delayed that decision for a period.”

Coalition MPs on Wednesday backed calls from business and ­unions for the $70bn JobKeeper scheme to be extended beyond its scheduled end date in a targeted way to help Victorian companies impacted by the shutdowns.