Federal government considers further assistance for states and territories during Covid outbreaks | Australian economy

Federal government considers further assistance for states and territories during Covid outbreaks | Australian economy

The commonwealth government is working on broadening its assistance measures to help states deal with Covid, in the wake of the worsening New South Wales outbreak.

Treasury is understood to have provided options to Scott Morrison, which are now under consideration. Additional mental health support will be provided, if needed, on top of the financial assistance already provided for businesses and individuals unable to work in what is becoming a protracted lockdown.

NSW premier Gladys Berejiklian has acknowledged the Sydney lockdown, already extended for a week beyond the original plan, is likely to go longer, with daily case numbers expected to top 100 in the coming days.

NSW’s lockdown triggered the emergency payments put in place when Melbourne entered its fourth lockdown in May. The emergency payments subsidise employees unable to attend work by either $325 or $500, with the payments flowing after a hotspot declared area is placed in lockdown for more than a week.

Under the agreement struck with state and territory leaders at national cabinet, the states are expected to provide business support, while income support has been left to the commonwealth. But with Sydney facing at least a month in lockdown, the Morrison government is being pressed for more financial support.

Last week, NSW treasurer Dominic Perrottet wrote to his federal counterpart Josh Frydenberg and asked for jobkeeper to be reinstated. That was immediately rejected by Frydenberg. “Jobkeeper is not coming back,” he said, but he noted the $500 in emergency assistance is the same level as the last tapered jobkeeper payment, before it expired.

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On Sunday, Perrottet said NSW had spent about $1.4bn on business support during the lockdown, and would announce a second assistance package later in the week.

“Last year there didn’t seem to be any light at the end of the tunnel whereas now the vaccine program is rolling out across the state – this gives hope this will hopefully be the last time we have to go through this,” Perrottet told Sky News.

“We’re going to have to do more, that’s just the reality.”

The Morrison government is reportedly working in conjunction with NSW on the support package, with a further broadening of the supports for individuals and households also on the cards.

Like all pandemic support, any changes will be put in place for all jurisdictions which find themselves in the same predicament.

NSW tightened its restrictions on Friday in response to growing case numbers, but has not defined “essential business”, allowing businesses to decide themselves whether they continue trading through the lockdown conditions.

Perrottet was reportedly one of the Berejiklian cabinet members opposed to extending the lockdown past its two-week expiry because of the impact on business, but acknowledged on Sunday the state could not afford to allow the virus to rip through the community.

Berejiklian has repeatedly said NSW would need to see vaccinated numbers much higher before it can learn to live with relative ease alongside the virus. Perrottet’s eyes remain on the re-opening of Australia.

“At some point in time we will be opening up the international borders – we can’t be living here on the other side of the world as a backwater,” he said.

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