Scott Morrison blueprint for Covid-19 relief

The PM unveils new model of Covid support, with taxpayers to spend $1.5bn a fortnight on payments for businesses and workers.

NSW Treasurer Dominic Perrottet, left, Prime Minister Scott Morrison and Premier Gladys Berejiklian at Kirribilli House in Sydney on Tuesday. Picture: Getty Images

Scott Morrison has unveiled a new model of economic support for Covid-19 outbreaks, with taxpayers to spend about $1.5bn a fortnight on direct payments to help businesses and workers endure the extended lockdown of greater Sydney.

The new model, which provides for greater levels of state government support, will apply to future lockdowns that premiers are free to impose as a “last resort” under the first two phases of national cabinet’s four-step plan aimed at returning life to normal.

The Prime Minister said on Tuesday he was “upgrading the commonwealth’s national response” to the pandemic, which would result in the federal and NSW governments spending $500m a week in cash payments for businesses that suffered a 30 per cent drop in turnover during the restrictions.

Ranging from $1500 to $10,000 a week, the payments will go to businesses with a turnover of up to $50m and the rate of payment will be fixed at 40 per cent of the enterprise’s payroll payments. Sole traders will receive $1000 a week if they are hit by the restrictions.

Worker payments will be increased, with individuals across NSW who lose 20 hours or more a week receiving a $600 weekly payment, while those who lose between eight and 20 hours a week will receive $375 a week.

“It’s in the national interest that we now put in place an upgraded set of arrangements for co-­operation with the states and territories that will first be put in place here, with NSW, when lockdowns enter into more protracted situations,” Mr Morrison said.

The Prime Minister also unveiled a $17m mental health package for NSW, including further funding for charities such as Lifeline, headspace, Kids Helpline and the Butterfly Foundation.

Responding to the extra support, the Victorian Labor government questioned why more generous arrangements had not been implemented for its two-week lockdown in May, declaring “it shouldn’t take a crisis in Sydney for the Prime Minister to take action” and accusing Mr Morrison of “double standards.”

 

NSW recorded 89 fresh cases of COVID-19 in the 24 hours to 8pm on Monday. Premier Gladys Berejiklian indicated that she would make an announcement about the state’s lockdown settings as early as Wednesday, with an extension widely anticipated.

At least 30 of the latest cases were people who had been circulating in the community rather than quarantining at home as close contacts of other cases.

Mr Morrison said companies that received cashflow support could not lay off their staff. “We expect people to honour their commitments,” he said. “It’s not in any NSW employer’s interest to leave staff ­behind at the moment. They know that they will need those staff in a few weeks’ time – hopefully it’s as soon as that – and they’ll be wanting to keep them on their books. That’s why I want to stress with this payment … you can still remain with your employer.

“You may have been working 40 hours a week and have agreed to reduce your hours down to 20 hours a week. You can keep working in that businesses, under those arrangements, and you can pick up the $600 payment from the commonwealth.”

NSW Treasurer Dominic Perrottet predicted the total support for business, including from previously announced measures, would equate to $5.1bn. “We will also be providing support for tenants, commercial tenants and retail tenants,” he said. “We will be mandating that there’ll be no lockouts or evictions during this period of time and any rent reduction from landlords to their tenants in that space, we will provide a rebate or discount in relation to land tax payable from that landlord to the state.”

Warren Hogan, a former ANZ chief economist and an adviser to small business lender Judo Bank, said his best estimate was that the business cash flow payments and Covid disaster relief support were worth up to $3bn a month.

Mr Hogan said the support was unlikely to be enough to prevent the NSW economy from contracting by about 2 per cent in the September quarter, but the new package would “put a floor under income and demand”.

The new support, alongside measures to encourage rental relief from landlords, would “go a long way to protecting the most vulnerable individuals and businesses by keeping them afloat, so that when we ease the restrictions we can bounce back pretty strong,” Mr Hogan said.

Federal Labor Treasury spokesman Jim Chalmers said the package did not do enough to maintain the link between employers and employees.

“What Morrison and (federal Treasurer Josh) Frydenberg announced today for business doesn’t guarantee workers will keep their jobs,” Dr Chalmers said. “The government is falling all over itself not to call this JobKeeper because they know now, in quite a humiliating fashion, that they were wrong to cut JobKeeper in the first place.”

The Victorian government was critical of the Morrison government for failing to implement a more generous package during its two-week lockdown in May.

“Victorians are rightly sick and tired of having to beg for every scrap of support from the federal government,” said a spokesman for the Andrews government. “It shouldn’t take a crisis in Sydney for the Prime Minister to take ­action but we are seeing the same double standard time and time again. His job is not to be the Prime Minister for NSW.”

Mr Frydenberg said the government had anticipated in the budget that there would be further outbreaks and lockdowns, “but not of the lengthy duration we’re now seeing in NSW.”

The Treasurer dismissed suggestions of double standards by providing extra support to NSW and not Victoria, declaring that the federal government had provided more support on a per capita basis to Victoria through JobKeeper. “Victoria was offered a 50-50 split and decided to reject it,” Mr Frydenberg told ABC.

Mr Morrison said the situation in NSW was akin to the start of Victoria’s four-month lockdown last year, rather than smaller state lockdowns in May and June.