Business Outlook Hinges on Government Economic Statement
(20 July 2020 - Australia) Major adjustments to the 'Jobkeeper' scheme and expanded guaranteed SME loans are tabled for announcement in Thursday's highly anticipated economic statement.
The JobKeeper scheme, currently keeping so many Australian enterprises afloat as the COVID-19 pandemic enters a damaging 'second wave' phase, is set to be divided into a series of tiered payments coupled with stricter eligibility requirements.
Offsetting this key concern for many firms is the fact SMEs are set to gain access to low rate semi-guaranteed loans of up to A$1 million on top of existing stimulus measures.
The loan scheme, which initially provided three-year loans, of which the first six months was interest free, will be expanded to a five-year loan term and the maximum loan value will be expanded from A$250,000 to A$1 million
The statement will reveal record debt forecasts compounded by a sharp slide in revenue and enormous new spending commitments to guide the economy through its biggest crisis since the Great Depression.
"When we first designed the scheme back in March, speed was of the essence, simplicity was of the essence. We needed to get the support out into the community, into the economy as swiftly as we could. After six months, it is now time to start tapering the scheme" stated Finance Minister Mathias Cormann.
"The uptake of the new scheme depends on confidence more broadly. The situation in Victoria means the recovery has been set back which is why it is essential we come up with creative solutions that offer small businesses in particular different ways to play their part in helping the country and Australians get back on their feet" said Commonwealth Bank CEO Matt Comyn.