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Federal financial support to Victorian businesses hit by COVID-19 lockdowns will be turned off once the state hits its 80 per cent vaccination target, pushing any further assistance on to Premier Daniel Andrews and Treasurer Tim Pallas.
In a sign of the federal government’s expectations that the state economy will bounce back quickly from the current lockdown, Treasurer Josh Frydenberg on Wednesday confirmed the $2.3 billion financial lifeline it has delivered to Victoria will end within weeks.
The reopening of NSW as it hits vaccination targets will mean a reduction in federal government business support.Credit:Eddie Jim
Victorian businesses with payrolls of under $650,000 have been able to access payments of between $2800 and $8400 a week under the business costs assistance program. Certain cafes, restaurants and bars have been able to receive between $5000 and $20,000 a week as part of the licensed hospitality venue fund.
A small business COVID hardship fund worth more than $250 million has also been in place to offer grants of up to $14,000 to small and medium-sized businesses.
The federal government has been covering half the cost of the assistance programs.
But as the state hits the 70 per cent and then 80 per cent vaccination targets, eligibility thresholds for businesses mean the support will start to end. Just over 49 per cent of Victorians over the age of 16 are now fully vaccinated. The state is expected to reach the 70 per cent mark by the end of October and 80 per cent shortly after.
Under the business cost assistance program, eligible firms will receive two payments through October. But once the 70 per cent target is reached, only businesses that remain closed or severely restricted will receive an automatic payment for the period October 29 to November 13.
Under the hospitality fund, payments to metropolitan Melbourne businesses will be reduced by 25 per cent and those in regional areas by 50 per cent as the state goes from the 70 per cent to 80 per cent vaccination rate.
Treasurer Josh Frydenberg said under the national plan for the reopening of the economy, federal contributions to business support programs would end.
“At this point it will be a matter for each state to decide whether any additional targeted business
support is needed in their jurisdictions as a result of any health restrictions they elect to impose,” he said.
“We can’t eliminate the virus, we need to learn to live with it in a COVID-safe way. Our economy has bounced back strongly before once restrictions are eased and is well-positioned to do so again when lockdowns lift.”
Victorian Treasurer Mr Pallas said the funding would sustain local businesses through the final period of lockdown.
“Victorian businesses have endured so much over the past 20 months and they’ve been amazingly resilient as we’ve faced challenge after challenge,” he said.
The winding down of the business support is in line with the federal government’s decision this week to gradually end COVID disaster payments that are made directly to individuals.
The disaster payment provided $450 a week to those who have lost fewer than 20 hours of work a week and $750 for those who have lost more. Those on income support have received an extra $200 a week.
Under this scheme, people will have to reapply each week to continue receiving the payment once a state or territory hits 70 per cent full vaccination. At 80 per cent, the payment will be reduced over two weeks.
Shadow treasurer Jim Chalmers said no one was arguing support programs went on forever, but argued it was too soon to remove them.
“What we are arguing, is that they are tailored to the economic conditions. Nobody who looks at what’s going on in NSWs or Victoria right now could objectively argue that people aren’t still doing it tough,” he said.
“The support needs to reflect that. What we need from the government is urgency when it comes to their responsibilities, empathy when it comes to the support that we need to be providing people, and we need them to bring people together rather than pick these unnecessary fights.”
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