Business grants axed when we hit 80%: What you need to know

Businesses in ACT, NSW and Victoria get one final top-up to their COVID-19 support – before it's cut altogether. (Source: Getty)

Economic support for NSW, ACT and Victorian businesses will be tapered and eventually switched off altogether once the states hit their 70 per cent and 80 per cent jab targets, the Federal Treasurer has announced.

The Federal Government has topped up the business grant packages of ACT and Victoria one last time, but also announced that they will be wound down in a matter of weeks, in a move designed to disincentivise states from going back into lockdown.

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Those receiving the ACT COVID-19 Business Grants will see an Extension payment of $10,000 for employing businesses and $3,750 for non-employing businesses, while larger businesses will get top-up payments of between $10,000 and $30,000 depending on turnover.

Meanwhile, Victorian businesses will see a co-funded package of $2.27 billion for businesses hardest-hit by the lockdown restrictions.

But this is shaping up to be the final stage of Federal support the states will see in quite a while: once the 80 per cent target is reached, it will become “incumbent on the states” to provide business support if they choose to re-impose lockdowns, Frydenberg said.

Responding to questions this morning about the reduced support, he said: “If it is not 80 per cent double dose vaccination rate [when] we bring to an end the COVID Disaster Payment and business support payment, when is it?

“When is it that the Government can stop spending $1.5 billion per week on these emergency support measures, and when is it that people can get their lives back and lockdowns can be lifted?”

Treasurer Josh Frydenberg is turning off support for businesses once states hit the 80 per cent vaccination target. (Photo by WILLIAM WEST/AFP via Getty Images) (WILLIAM WEST via Getty Images)

The announcement comes a day after Frydenberg made a similar announcement about the COVID-19 Disaster Payments, which will see the $750 weekly payments reduced to a ‘flat’ payment of $450 at 70 per cent, and axed altogether at 80 per cent.

NSW and the ACT are expected to reach the 80 per cent double-dose vaccination target by 21 October, while Victoria will reach that target around 5 November.

For NSW, ACT and Victorian small businesses, here’s what Frydenberg’s announcement means.

When states hit the 70% double vaccination rate…

• NSW: JobSaver payments will drop from 40 per cent of weekly payroll to 30 per cent. This will happen by 10 October, the Treasurer indicated in a statement.
  From 10-23 October, weekly business payments will drop by a quarter to $1,125 (minimum) and $75,000 (maximum). Grants will become 30 per cent of weekly payroll, while sole trader grants will become $750.

• ACT: There aren’t clear details on this yet on how much the business grants will reduce by, but it appears that only the hardest hit will get continued funding.
  “The jointly funded business support package tapers once the state reaches 70 per cent full vaccination rate, to ensure support is focused on those industries that remain closed or severely restricted,” Frydenberg said.

• VIC: Businesses will be able to get two fortnightly payments in the month of October, with further details here.
  Businesses in this state that are forced to stay closed or “severely restricted” between the 70 and 80 per cent double doe target will “receive an automatic payment for the period from 29 October to 13 November”.

When states hit the 80 per cent double vaccination rate…

So far, it looks like the Federal Government will turn off funding altogether, for all states.

“The Commonwealth will cease funding state business support programs at 80 per cent full vaccination in line with the National Plan for Reopening,” Frydenberg said.

Frydenberg’s moves to reduce economic support for workers has already attracted criticism from community services groups.

Australian Council of Social Services (ACOSS) CEO Cassandra Goldie said it was “unconscionable” for vaccination rates to be the reason why income support was being withdrawn.

“Cutting off disaster support will see many of the 1.7 million people currently receiving disaster payments in NSW, ACT and Victoria end up on the grossly inadequate JobSeeker Payment of $45 a day, which is less than half the $750 per week Covid Disaster Payment,” she said.

“It will leave others with no income at all, including people on temporary visas who are ineligible for JobSeeker and other income support.

“It’s appalling to give hundreds of thousands of people, including single mums, older people and people with disability one week’s notice that their payments will stop unless they apply again in the case of NSW.”

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