Thursday was a really tough day for Victorian families and businesses. Our community has been through so much, and everyone was hoping to avoid another lockdown. But it wasn’t to be.
More than six million Victorians are now locked down for a fifth time.
Businesses are closed.
Kids are out of school.
People unable to attend work.
The impact on people’s lives, livelihoods and wellbeing is immense.
But we will get through this as we have done before.
Victorians have been magnificent through the pandemic, always doing our best to stay safe, stay strong, and look after one another.
They do so knowing their federal and state governments are working together to provide economic support to those in need.
From day one of this latest lockdown, Victorians will now be eligible for federal income support.
Those who have lost between eight and 19 hours of work can receive payments of $375.
Those who have lost 20 hours or more will be eligible for payments of $600.
No liquid asset test will apply. Payments will be made through Services Australia.
The Morrison government will pay those recipients who live or work in the areas declared as a commonwealth Covid hot spot, including Greater Melbourne, Moorabool Shire, the City of Greater Geelong, Borough of Queenscliffe, and the Surf Coast Shire.
The state government will fund payments to those Victorians outside the commonwealth hotspot areas.
The announcement of this income support has been welcomed by the Victorian Chamber of Commerce and Industry, which said “seeing our political leaders come together to provide this much-needed assistance promptly creates certainty and will enable businesses and workers to get through this difficult period.”
With the federal government providing the majority of income support over the course of this first week, the state government on Thursday announced a $200m business support package, consisting of grants and an events support fund.
This is welcome. In the event, however, the Victorian lockdown is extended, commonwealth support for business will be available from the start of week three. This is similar to the approach adopted in NSW.
Businesses that have seen their turnover decline by more than 30 per cent due to the lockdown can receive payments of between $1500 and $10,000 a week.
This will be equivalent to about 40 per cent of their payrolls.
These payments will be considered non-assessable income, and, therefore, tax free.
To be eligible, businesses will need annual turnovers between $75,000 and $50m, which covers about 98 per cent of businesses in Victoria, which together employ more than 2.4 million people.
Sole traders will also be covered with payments of $1000 a week.
Businesses receiving this cash boost will be required to commit to maintaining their headcounts, which includes full-time and parttime staff, as well as long-term casuals.
This new business support program will be funded on a 50/50 basis with the state government.
A similar type of cashflow boost linked to payroll was implemented by the federal government last year, and provided businesses with the necessary support to meet some of their fixed costs, including rent and utilities. These costs were still being incurred even as customers were not coming through the door.
Finally, the government will work with Australian Taxation Office to provide administrative relief for businesses suffering hardship. This could include reduced payment plans, no interest on late payments, and varying instalments on request.
During the height of the pandemic last year, the ATO adopted this more flexible approach as one of the many measures to support businesses in their hours of need.
This recent outbreak in Victoria is a timely and somewhat painful reminder that we are, by no means, out of the Covid crisis.
Australia has done remarkably well during Covid, on both the health and the economic front, with 160,000 more people in work today than before the pandemic began, and a loss of life far below that experienced by comparable nations.
But there is still much work to do.
This latest support package for Victoria will help many people across the state during the difficult days ahead.
We’re all in this together, and Victoria’s success in beating the virus will be Australia’s success.
JOSH FRYDENBERG IS THE FEDERAL TREASURER