National

Job plan rejig as Victoria bleeds billions

By AAP Newswire

Scott Morrison has confirmed there will be a further phase of income support once coronavirus welfare programs expire in September.

As millions of Melburnians re-enter lockdown for six weeks, the prime minister is considering what to do with JobKeeper wage subsidies and the temporarily doubled JobSeeker dole.

"Where there is the need, there will continue to be the support," Mr Morrison told reporters on Wednesday.

Treasurer Josh Frydenberg is expected to outline a rejigged job support plan alongside an economic update on July 23.

He is also considering bringing forward legislated personal income tax cuts to stimulate the economy.

The next stage of the tax cuts - delivering a 19 per cent rate to everyone earning less than $40,000 - is scheduled to start in July 2022.

The final and most expensive stage, which would lead to everyone earning between $45,000 and $200,000 paying just 30 per cent tax, kicks in from July 2024.

"We are looking at that issue, and the timing of those tax cuts, because we do want to boost aggregate demand, boost consumption, put more money in people's pockets and that is one way to do it," he told ABC radio.

Victorian Premier Daniel Andrews is confident the twin pandemic payments will be extended, saying the prime minister understands there will be more hardship and pain in his state.

"I'm confident there will be support there," he told the Nine Network.

The Melbourne lockdowns will cost the state economy $1 billion a week and send shockwaves across the country, with Victoria accounting for a quarter of Australia's economic output.

"This is a serious impediment to the speed and the trajectory of the nation's economic recovery, not just Victoria," Mr Frydenberg said.

Shadow treasurer Jim Chalmers said the Victorian lockdowns must be taken into account when the economic update and JobKeeper review are released.

"This outbreak and these necessary new restrictions come with even more uncertainty for businesses and their workers, making the case for clarity on the future of JobKeeper even more urgent," he told AAP.

"Scott Morrison has only added to the uncertainty by delaying the release of his secret JobKeeper review.

"The government should better target and taper support, but shouldn't turn off the tap when businesses are struggling with new restrictions."

More than 800,000 loans worth $260 billion have been deferred throughout the pandemic.

Banks are offering to extend the six-month deferrals for another four months, but only for customers who genuinely need emergency assistance.

"Banks are pledging to make sure that no customer falls off a cliff at the end of that six months," Australian Banking Association chief executive Anna Bligh said.

"Where the customer is unable to pay anything because they're still affected there will be an extension of another four months.

"Those that can make repayments at the end of six months, they can start doing so."

Financial services regulator APRA has also provided relief to encourage banks to restructure loans.

These options include extending the term of the loan or temporarily moving to interest-only repayments.