Sydney’s lockdown has passed the four-week mark and there’s little prospect of it ending soon.
Many firms and business face a bleak end to winter, and well beyond.
The federal government now needs to do more to help them make it safely to the other side.
The government’s disaster relief payments announced to date are inadequate for an extended lockdown.
The current $600-a-week disaster payment covers just over half the wage of the median worker.
The payment should be increased to $750 per week, the same level as the original JobKeeper, or about two-thirds of the median worker’s wage.
The government should also reintroduce the JobSeeker coronavirus supplement, so that people on JobSeeker get an extra $75 per week on top of the normal $310 payment.
There’s no prospect of unemployed Sydneysiders looking for work or expanding their hours in lockdown.
But the supplement should be available to all unemployed Australians, because that would provide an important fiscal boost to the economy, helping offset the economic hit to other states from the long Sydney lockdown.
Sydney businesses also need more support to make it through. It’s unreasonable to expect businesses to wear on their own balance sheets the cost of government-imposed lockdowns.
The JobSaver cash-flow boost covering 40 per cent of payroll costs, up to a maximum of $10,000 a week, is a good start, but is clearly inadequate for such an extended lockdown.
Doubling the share of payroll costs covered by JobSaver to at least 80 per cent of payroll and expanding it to cover larger firms, again on the condition that firms retain all existing staff, would help businesses to reboot once lockdowns end.
And the NSW government should offer Sydney firms desperately needed rent relief by offering to cover half the cost of any rent forgiven by landlords.
These supports can get us through the next couple of months. But the federal government should put in place a plan to deal with further lockdowns in the months ahead.
Whether that should be by reinstating JobKeeper, or expanding existing supports, is less important that the quantum of support that is provided.
What Australians in every and state and territory need most is certainty that government will support them through whatever comes next.
With Australia’s vaccine rollout well behind schedule and the Delta variant raising the stakes, we face an uncertain few months ahead.
While you’re here…
Grattan Institute is an independent not-for-profit think tank. We don’t take money from political parties or vested interests. Yet we believe in free access to information. All our research is available online, so that more people can benefit from our work.
Which is why we rely on donations from readers like you, so that we can continue our nation-changing research without fear or favour. Your support enables Grattan to improve the lives of all Australians.
Danielle Wood – CEO