Josh Frydenberg pledges billions to businesses over coronavirus

Josh Frydenberg says the government will spend more than $1bn on stimulus measures in response to the coronavirus crisis.

Treasurer Josh Frydenberg. Picture: AAP

Josh Frydenberg says the government will spend more than $1bn on stimulus measures in response to the coronavirus, with most of the support to help small businesses hit by the epidemic.

The Treasurer said there would be policies to help businesses stay afloat as the crisis escalates, ­declaring that the government was focused on “ensuring that businesses stay in business, Australians stay in jobs, and that the cash flow will be maintained”.

The Australian understands the government is considering ­offering wage subsidies for businesses impacted by the economic ramifications of the virus, while there is also considerations for “tax holidays” for affected businesses. There could also be investment incentives and money for skills training.

Mr Frydenberg on Thursday confirmed the government would “have another look” at the deeming rate, which defines pension benefits for retirees with savings.

Nationals senator Matt Canavan said the government could stimulate the economy by funding the “excessive network costs and green subsidies” in the energy market, as recommended by the Australian Competition & Consumer Commission.

Senator Canavan said the measure could cull 10 per cent of the energy costs of manufacturing businesses and put more money in the pockets of consumers.

“The best way we could help rekindle manufacturing costs would be to lower the energy bills,” Senator Canavan said. “We should look again at the ACCC’s recommendations for the government to pay for excessive network costs and green subsidies.

“This week I revealed in Senate estimates that each wind turbine benefits to the tune of over $600,000 a year thanks to charges paid on people’s power bills.

“We shouldn’t be building renewable energy at the cost of jobs in our manufacturing industry.”

Retail giant Gerry Harvey told The Australian on Wednesday that the government should provide interest-free loans to manufacturing firms to stimulate local employment and industry

He said the coronavirus was a “wonderful opportunity” for local manufacturing companies as imports had become more expensive.

“As long as it increases the capability of these manufacturers to employ more staff and compete more effectively with imports. That would be very good for the Australian economy,” he said.

“It would also be very important if (the government) came out with a situation where they said, ‘we guarantee loans will be approved within 10 days of applic­ation’.”

Opposition Treasury spokesman Jim Chalmers said the government should consider raising Newstart to stimulate the economy. “We’ve said for months now that we support a responsible increase in Newstart. We’ve been saying that over and over again,” Dr Chalmers said.

“There are (also) options with the timing of their tax cut. We took to the last election a business investment incentive which will do a lot of good in the economy.”