A multi-billion dollar economic support package for businesses and workers affected by the greater Sydney lockdown has been slammed by unions as a betrayal of workers but business groups say the lifeline will save jobs.
The joint commonwealth and New South Wales government package unveiled on Tuesday – to cost more than $500m a week during the greater Sydney lockdown – sparked a fresh row between the federal and Victorian governments with the latter accusing Scott Morrison of a “double standard” that favoured his home state.
“Everyone in Australia believes people in Sydney and NSW deserve every possible support as they battle a second wave and a long lockdown,” a Victorian government spokesperson said.
“But Victorians are rightly sick and tired of having to beg for every scrap of support from the federal government. It shouldn’t take a crisis in Sydney for the prime minister to take action but we are seeing the same double standard time and time again. His job is not to be the prime minister for NSW.”
The prime minister’s office returned fire late on Tuesday, saying the initial package offered to NSW was identical to the first two weeks of Victoria’s “circuit breaker” lockdown in May.
“As the pandemic has evolved and as the situation in NSW has gone beyond those two weeks, the commonwealth’s support has also evolved. If Victoria were to go into another extended lockdown, it would receive the same support as is being offered to NSW,” a spokesperson said.
“The NSW government has worked constructively with the commonwealth to support their households and businesses while the Victorian government’s politicised approach has unfortunately been to issue decrees by media instead of picking up the phone to find solutions as a partnership.”
Morrison’s spokesman said that the commonwealth had offered to share all costs with Victoria when negotiating its earlier package, but the state had asked for the commonwealth to handle income support while they would support businesses.
Under the new NSW Covid support package, which will boost emergency payments for workers and offer a new cashflow scheme for small and medium businesses from the fourth week of lockdown, the federal and NSW governments will split costs with the scheme to be demand-driven.
The support for business is estimated to cost about $500m a week, while the income support component is expected to significantly rise from the $35m a week paid out by the commonwealth in the initial phase of the latest Sydney lockdown.
The business payments require a commitment from the employer not to shed staff but the Australian Council of Trade Unions said it would provide no certainty to workers. The ACTU had been pushing for the reinstatement of jobkeeper.
“The Morrison government has walked away from the best tried and true job-saving program our country has seen – jobkeeper,” the ACTU secretary, Sally McManus, said on Tuesday.
“They have radically cut the support given to workers in 2021 compared to 2020. Weekly payments have been slashed by up to $150 per week, there is no guarantee jobs will be kept and those who have already lost their jobs will get nothing.”
Individuals who have lost more than 20 hours of work as a result of the lockdown will be able to access a Covid-19 disaster payment of $600 each week – up from $500. Those who have lost between eight and 20 hours of work can get $375 a week – up from $325.
To streamline the household payment system, the government announced it would make the disaster payment ongoing during a lockdown, meaning recipients will only need to apply once.
Small and medium-sized businesses will be able to access between $1500 and $10,000 a week paid to a maximum of 40% of their NSW payroll payments, providing they make a commitment not to shed staff and can demonstrate a 30% drop in turnover.
To receive the payment, businesses must maintain their full-time, part-time and long-term casual staffing level as of 13 July 2021.
Business groups said the new scheme would save jobs and livelihoods.
“Today’s additional support package, extending the national disaster payment scheme and increasing the payment for extended lockdowns, as well as providing businesses with a cashflow boost of up to $10,000 per week, will save jobs and help protect livelihoods,” the Australian chamber of commerce and industry acting chief executive, Jenny Lambert, said.
“This is a strong package and we appreciate the swift and coordinated response by the federal and NSW governments.”
The boost comes as consumer credit card data released by CBA, Australia’s biggest bank, showed spending growth in NSW had been hit hard by the lockdown, with card spending up just 2.1% compared to 2019 down from 9.9% the previous week.
Spending on eating and drinking out of the home tumbled after pubs, bars and restaurants were ordered to shut their doors. Alcohol services spending plunged almost 60% while spending on food services fell almost 30%, according to CBA data.
The prime minister, Scott Morrison, said it was in the national interest to ensure the NSW lockdown was effective. He said the demand-driven package would be in place for the duration of the lockdown.
“The NSW outbreak has proved to be more severe, more dangerous, and it’s in the national interest that we now put in place an updated set of arrangements,” Morrison said on Tuesday.
“Help is here and help is on the way as well.”
The government said the level of support would apply nationally to any state or territory that experienced an extended lockdown beyond three weeks following the declaration of a commonwealth hotspot.
The assistance will stop when lockdown restrictions are eased or when the commonwealth hotspot declaration is removed.
When asked how the government would ensure that a business kept its staff, Morrison said “we expect people to honour their commitments”.
The NSW premier, Gladys Berejiklian, said the support package would give people “peace of mind” which would help with compliance.
“When you provide that economic support for individuals and businesses, it gives us the freedom to do what we need to do on the health side by asking everybody to respect the advice that we’re providing, but also having that confidence not to leave the house unless you absolutely have to,” the premier said.
The NSW treasurer, Dominic Perrottet, said the package would provide support for “every business, every worker, right across the state”.
“We have said from the start we will prioritise the economy before the budget. So whether you are a casual worker or a permanent worker, a small business or a large business, the NSW government has your back,” the state treasurer said.
Other state measures announced include the extension of small business grants and a decision to waive payroll tax bills for the first quarter of the year.
Tenancy support will be introduced for both commercial and residential renters, with land tax reductions and rebates in place for landlords who provide rental relief to their tenants. There is a ban on evictions.
The federal government will provide further tax support to businesses by making the NSW small business grants, including the new small business payments, tax exempt, and providing administrative relief through the tax system for businesses experiencing hardship.
A $17.4m mental health support package for NSW has also been announced, which will boost crisis and mental health services including Lifeline, free 24-hour support via Sonder, and counselling for perinatal depression and anxiety.
The package was unveiled as NSW recorded 89 new locally acquired Covid-19 cases on Tuesday, with 21 of these infectious while in the community. An eastern suburbs man in his 70s died of coronavirus – the second death during the Sydney outbreak.
Berejikian said her “obsession” was to get the state out of lockdown “as quickly as we can”, with an announcement due by Thursday on whether it will be extended.
The federal shadow treasurer, Jim Chalmers, said the package fell short of what was needed to support businesses and workers.
He said the package did not guarantee “the crucial link between employees and business” like jobkeeper did.
– additional reporting Ben Butler