Post JobKeeper Stimulus package

|by Jun Yang|Business Advisory

There are a couple of measures announced during the week by the Morrison government as post JobKeeper stimulus package worth $1.2 billion.

SME Recovery Loan Scheme is designed to provide continuous assistance to businesses which are currently on JobKeeper program. The government and commercial lenders are working together to ensure eligible businesses can access cheaper finance to recover from the pandemic when JobKeeper ends.

The eligible businesses are those recipients of JobKeeper payment between 4 January 2021 and 28 March 20201; small and medium businesses with turnover up to $250 million.

The scheme features following terms:

  • 80% government guarantee;
  • Allowing borrowers to refinance existing loans into the Scheme, including those from the SME Guarantee Scheme;
  • Allowing lenders to offer a repayment holiday up to 24 months;
  • A 7.5% interest rate cap;
  • Loan up to $5 million; and
  • Loan term of ten years

Loans under the Scheme cannot be used to purchase of residential property, financial products, the provision of finance to an associated entity, or lease, rent, hire and hire purchase existing assets that are more than halfway into their effective life.

The 2nd measure included in the support package is to subsidise 50% of $800,000 domestic flights to select tourism destinations in Australia. The initial destinations are announced on 11 March 2021 include Gold Coast, Cairns, the Whitsundays, Alice Springs, Broome, Kangaroo island and Merimbula. The government intends to add more on the list.

The package aims at sustaining more than 8,000 jobs in the aviation section as well as support for extra costs in the airport and staff training during and after COVID – 19 . Let us hope this package encourage more people holiday in Australia and inject the life line to the ailing tourism industry during the time when board stays shut to the international travellers.

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