SYDNEY — Australian Prime Minister Scott Morrison has announced federal support for states enduring long lockdowns, saying it is in the national interest to be more generous.
The Sydney lockdown is expected to be extended into its fourth week on July 16 as cases head towards 800 since mid-June, including two deaths.
The support package “will go for as long as the lockdown requires”, the prime minister said on July 13.
“It is in the national interest that we ensure that a lockdown will be effective.”
A cash flow boost to businesses about to enter their fourth week of lockdown will cost AU$500 million ($372.9 million) a week from next week.
The federal government will share the cashflow support burden 50/50 with the New South Wales government.
“It gives us that freedom and gives everybody that breather to be able to follow the health advice and to try to get out of the lockdown as quickly as we can,” New South Wales Premier Gladys Berejiklian said.
The support package will be cut out when the Sydney lockdown ends but sets up a national framework that will be applied to other states and territories that suffer a subsequent long outbreak.
From week four of a lockdown in a declared hotspot, the disaster payment will be AU$600 ($447.54) if a person has lost 20 or more hours of work a week or AU$375 ($279.71) for between eight and less than 20 hours of work a week foregone.
“We don’t know how long this extended lockdown will go for,” Treasurer Josh Frydenberg said.
“Those programs now form a template that can be rolled out in other states and territories.”
Businesses are required to maintain staffing levels that were on the payroll as of July 13 but can reduce hours of work because workers can get the disaster payment top-up.
“Already more than 130,000 people from New South Wales have applied for that payment. I expect that number to increase,” Frydenberg said.
“We recognize this is a very difficult and trying time for New South Wales and for the country as a whole with more than five million subject to lockdown.”
The cash flow support for fixed costs is capped at AU$10,000 ($7459) per week and is set at about 40 percent of a businesses’ payroll.
Businesses have to show that their turnover is down by 30 percent or more.
Sole traders can get AU$1,000 ($745.9) a week, and not-for-profit organizations are also eligible.
“The impact has been swift and brutal,” managing partner Grant Saxon at consultancy firm BDO Sydney said.
“Hopefully, with this new support, businesses and sole traders will be able to get through the next few difficult weeks.”
The treasurer said Australia had transitioned to a different form of economic response, with localized outbreaks, not a nationwide crisis.
“We’re dealing with an economy that’s at a different stage than when we introduced JobKeeper,” he said.
Under the Jobkeeper program, eligible businesses and not-for-profits severely affected by Covid-19 received federal government support payments of AU$1500 ($1306) starting late March to Sept. 27, 2020. The compensation was later limited in scope in the extension period from Sept. 28, 2020, to March 28, 2021, to support businesses still bearing the brunt of Covid-19.
Earlier last year, fear gripped the community, and long lines formed outside Centrelink offices. Centrelink is a master program of the government of Australia that delivers social security payments and provides services to Australians.
Financial advisory company AMP’s chief economist Shane Oliver estimates the lockdown is costing the economy AU$1 billion ($745.9 million) a week and will be harder to recover from if the lockdown goes for another four weeks.
(Edited by Vaibhav Pawar and Krishna Kakani)