ECONOMIC HIBERNATION: Morrison government looks at 6-month mortgage repayments holiday, rent, utilities and small business relief

- March 27, 2020 2 MIN READ
The Australian government is considering putting businesses into an economic ‘hibernation’ to ensure that they aren’t left with debts and are able to resume ‘business as usual’ as soon as the coronavirus crisis is over.

Finance Minister Mathias Cormann told the ABC the government was looking for a “fair and equitable” way to share the pain so that Australians could get back to normal life once the crisis passed.

Mathias said it was a difficult process, however, the government wants to ensure “everyone has the best possible opportunity to be there on the other side”.

“That is not easy,” he said.

The minister said the federal government was expecting some sacrifices must be made and the government would be looking to the banks to waive mortgage payments for at least the next six months to provide relief for those impacted by the economic shutdown.

Meanwhile, the national cabinet is currently sitting to discuss rent relief and a range of measures for tenants and small businesses as the federal government puts its finishing touches to a third stimulus package.

Treasurer Josh Frydenberg has also earmarked energy retailers as the next service industry that will need to provide relief for its customers.

In a statement released today, Frydenberg said the government has set reasonable expectations of energy companies to protect householders and small business customers during the COVID-19 pandemic.

“The electricity and gas sector, as an essential service, has an obligation to support customers through these difficult times,” Frydenberg said.

“The Government is focussed on working to slow the spread of the virus, while putting in place actions to limit the impact of COVID-19 on people’s lives, jobs and businesses – and industry must play their role.”

The new expectations include waiving any disconnection/ reconnection or contract break fees for  small businesses which have gone into hibernation, along with daily supply charges to retailers, during any period of disconnection until at least 31 July 2020;

  • Offering all households and small businesses who indicate they may be in financial stress a payment plan or hardship arrangement;
  • Not disconnecting customers who may be in financial stress, without their agreement before 31 July 2020 and potentially beyond;
  • Deferring referral of any customer to a debt collection agency for recovery actions, or credit default listing until at least 31 July 2020 and potentially beyond; and

The Minister for Energy, Angus Taylor said it is imperative energy companies step up and do their part.

“While several energy companies have taken some steps to assist their customers in financial stress, during these difficult times we expect more action. We expect energy companies to look after their customers, keep them connected and waive additional fees and charges for those doing it tough,” he said.

“We expect them to do more to help small businesses who have gone into hibernation to avoid any energy costs, and we expect them to pass on the huge price drops we are seeing in the wholesale market.”