New government allowances announced as huge job losses predicted

The Prime Minister today moved to get an unprecedented amount of fiscal life support for Australian families as the danger to jobs and livelihoods posed by the spread of lockdowns took centre stage.

Scott Morrison said pandemic leave payments for Melburnians would be available from 8am today and child care allowances would be in place. More will be announced shortly.

He said the relief  – termed a “disaster payment” when announced on Monday – could be available in other states. “If another state were to be in a position – and God forbid they were – that there was a disaster of the scale that we’re seeing in Victoria, then a disaster payment of this nature would be entered into.”

Mr Morrison has confirmed if other states wanted to offer the sick leave substitute, they could.

The help so far in Victoria:

• Businesses will be given grants from $5,000 up to $10,000 if they are forced to close.
• Pandemic leave disaster payment” for people in Victoria who are required to self-isolate for 14 days but do not have any paid leave. The payment is $1,500 for the 14 days.
• Victoria’s childcare sector will get top-up payments and parents given extra allowable absences. The centres will receive a 5% top-up payment in addition to the $708 million transition package outlaid for the sector to replace JobKeeper in June. A larger top-up of between 10% and 25% of the existing transition payment will be given to centres which see their attendance levels reduce below 30% over the next six weeks, in a bid to ensure revenue remains about 80-85% of pre-COVID levels, on average, across the sector.

Pandemic leave disaster payments are now available for Victorians suffering financial losses during the pandemic, with the $1,500 allowances open to Victorians with no sick leave who are forced to self isolate. People can access the payment multiple times if they are required to self-isolate on more than one occasion.

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Treasurer Josh Frydenberg also said there would be more income support in his budget announcements on July 23, and additional measures to keep businesses going.

The RBA on Tuesday announced its unemployment expectations were now 10 per cent, with any recovery more subdued “due to Victoria’s position”.

Of most concern is the 2.2 million small businesses which employ half of all Australians.  They are teetering on the brink of collapse thanks to the new shutdowns.

Despite a ready supply of lenders and grants, it is estimated over 250,000 jobs will go into hibernation after Melbourne’s shutdowns start tonight – and few are prepared to predict how many will survive.

New South Wales continues to hang by a thread as health officials battle to hold back new cases. Queensland closed its borders to NSW and ACT from Saturday in a major blow to tourism operators.

Both Victoria and NSW are the engine houses of the Australian economy, with Victoria generating $369 billion and NSW $461 billion – over 80 per cent.

Fears about employment are now uppermost in the minds of half the nation, up 16 per cent in less than a month, according to a Crosby Textor poll published in today’s Financial Review.

Two other findings:  less than a third believe they should go back to offices and work places, and 70 per cent now don’t believe COVID-19 will stop being a threat until a vaccine is found.

That could be years away.

“Fears about the safety of returning to an office environment have coincided with a drop in those who say they have returned to their offices,” The Financial Review quotes CT Group researchers as saying.

“The occurrence, or even threat of, a second wave of the virus may continue to prevent the migration of employees back to the workplace, despite government advice.”

Mr Frydenberg this morning referred to growing concern about the fragile mental state of the nation’s workforce, and promised more help would be made available to counter it.

The brunt of the pain from Victoria’s lockdown will be felt by small businesses – retail, wholesale, automotive and light manufacturing and commercial construction.

Figures released by the Australian Prudential Regulation Authority showed repayments were frozen on loans worth $274bn at the end of June, or 10 per cent of total loans worth $2.7 trillion.

Peter Strong, chief executive of the Council of Small Business Organisations, said APRA’s latest figures were deeply concerning, and added they showed  some small businesses will continue to need government support.

About 17 per cent of small business loans worth $55bn were subject to deferral, compared to 11 per cent of housing loans.

Reserve Bank governor Philip Lowe said after holding rates. “The recovery is expected to be only gradual and its shape is dependent on containment of the virus.”