What are the different states doing to stimulate the economy?

author-avatar By on March 13, 2020
What are the different states doing to stimulate the economy?

Photo by Scott Blake on Unsplash

Most states have now announced their own stimulus packages, targeting different areas of the economy.

Updated 21 March with Victorian Government stimulus announcement.

After the Federal Government announced its own $17.6 billion stimulus package on 12 March, state governments have either followed suit, or have been ahead of the curve when it comes to implementing their own fiscal stimulus. 

So, what exactly are the states doing, and how could it impact you?

See:

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Provider
Ad rate
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Comp rate*
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Monthly
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CelebRate OO P&I ≤60% LVR
2.39% 2.39% $1,558 Go to site
2.74% 2.74% $1,631 Go to site

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 12 August 2020. View disclaimer.

Victorian Government stimulus

Premier Daniel Andrews announced a $1.7 billion stimulus package, to be rolled out in three stages.

Stage One

The first stage is $550 million, in the form of payroll tax refunds to more than 24,000 small and medium sized businesses.

The aim is to keep 400,000 workers employed, particularly across the entertainment and hospitality industries, according to Mr Andrews.

"This is not a tax cut," he said.

"It is a refund back in the accounts of businesses in just a few days' time, cash that will be critical to them being able to support their workers and in turn those workers being able to support their families."

Stage Two

Stage two is a $500 million 'hardship' fund, consisting of small grants and tailored support.

This will be in conjunction with the Victorian Chamber of Commerce and Industry, and the Australian Hotels Association and other industry representatives. 

This one is designed to still support businesses who may not pay payroll tax, yet are still "doing it really tough".

Stage Three

Stage three consists of $600 million, and includes waiving 12,500 venues' liquor licence fees due in March, among other measures.

Commercial tenants in government buildings will also be able to apply for rent relief. 

Melbourne

There is some luck if you're living within the Melbourne City Council local government area. On 18 March, that council introduced its own $10 million stimulus package - key highlights are:

  • A virtual Business Support Summit at Melbourne Town Hall
  • Suspending fees for Food Act registrations and street trading permits for three months
  • Halving rent for eligible tenants in Council owned buildings for three months
  • Opportunities to deploy casual and part-time staff to enhance city cleanliness and amenity.
  • Developing a rates hardship policy for consideration at the end of the month. 

There will also be various grants and support to businesses. The City of Melbourne includes postcodes: 3000, 3002, 3003, 3004, 3005, 3010, 3031, 3050, 3052, 3054, 3141, and 3207.

Australian Capital Territory Government stimulus

On Friday 20 March, Chief Minister Andrew Barr announced funding for small businesses, particularly those in the hospitality, arts and entertainment sectors.

Households are also beneficiaries of the stimulus package, and various measures include: 

  • $150 rebate on rates bills for every household, and a $2,622 credit for businesses.
  • $250 cash payment to public housing tenants.
  • $20 million fund for contractors to undertake 'simple works' on government assets.
  • $500,000 arts grant funding.

Mr Barr said the $137 million package is likely just the first wave of stimulus.

"There will be more to come - there will need to be more to come," he said.

Tasmanian Government stimulus

On March 19, the Tasmanian Government announced a $420 million stimulus package, primarily targeting small businesses and keeping people in jobs. It includes:

  • Three year interest-free loan package of $20 million to small businesses in the hospitality, tourism, seafood production and exports sectors with a turnover of less than $5 million - to be used for equipment purchase, or restructuring business operations.
  • Payroll taxes waived for those industries for the last four months of 2019-2020, and also waivers for those with payrolls up to $5 million in other industries upon application. 
  • $50 million government building maintenance program.
  • Reducing the payment terms of the Tasmanian Government from 30 days to 14 days to stimulate cash flow to small businesses.
  • Apprenticeship and Traineeship grants of $5,000 for businesses to hire an apprentice or trainee in tourism, hospitality, building and construction, or manufacturing industries. 
  • A payroll tax rebate for one year for businesses that employ a young person under 24 years between April and December 2020.
  • Eighty thousand dollars fo the Tasmanian Chamber of Commerce and Industry to provide HR and international relations assistance. 

There will also be a $50 million package of interest-free loans over three years made available to local governments.

For April, May and June 2020, the state government will also waive a number of lease, license and parks' entry fees for tourism operators.

Liquor licenses will also see a 50% discount, for calendar year 2020, backdated to 1 January. 

Annual fees will also be waived for rock lobster, giant crab, fin fishers and abalone divers for 12 months. 

There will also be $1 million dedicated towards a 'Holiday at Home' tourism campaign, and $100,000 for a Tourism and Hospitality Training Fund. 

Northern Territory Government stimulus

On 18 March, the NT Government announced a $60 million stimulus package, mainly targeted at supporting trades and small business.

Under the scheme, residential and investment property holders will receive a $6,000 grant for renovations if they contribute $2,000 of their own money.

This home improvement scheme is estimated to cost around $30 million.

Under this scheme, owners will also be able to receive $4,000 if they spend $1,000.

Eligible businesses will also get $10,000, and another $10,000 if they contribute $10,000.

Chief Minister Michael Gunner said this is targeted at small businesses and tradies.

"This is about saving people's jobs," he said.

"We can't completely stop the economic hit that's coming, but we can make sure we're still standing at the end."

The stimulus package is expected to be rolled out within the next few weeks.

In January, the NT Government announced a $100 million package targeted at public housing.

New South Wales Government stimulus

New South Wales on 16 March announced a $2.3 billion 'coronavirus stimulus package'. 

This includes extra funding for healthcare, and payroll tax exemptions. 

NSW Health will receive an extra $700 million to boost services including intensive care, COVID-19 testing, among other things.

The remaining $1.6 billion, according to Premier Gladys Berejiklian is going towards economic stimulus.

"Our first priority is always the health of the people of this state and looking after their families and jobs," she said.

Payroll taxes will also be waived for businesses with up to $10 million in payroll until the end of financial year - at a cost of $450 million.

The next round of payroll tax cuts will also raise the threshold limit to $1 million for the next financial year.

Eighty million in fees and charges will also be waived for small businesses in the hospitality industry and trades.

Extra cleaning measures will also be employed at government owned buildings at a cost of $250 million.

There will also be expenditure on capital works and maintenance of public assets at an estimated cost of $750 million.

Western Australian Government stimulus

The Western Australian Government has announced a $607 million stimulus package, which includes the freezing of household bills.

Bills will be frozen until 'at least' July 2021.

This includes the charges of electricity, water, public transport fares and motor vehicle charges. 

This is estimated to cost more than $400 million.

Part of this stimulus package also includes 20 days' COVID-19 - coronavirus - leave for all public servants.

This includes leave for those who have contracted the virus, anyone who needs to care for someone, someone who is required to self-isolate, or someone who cannot access schools/daycare arrangements.

In addition, the Energy Assistance Payment - a rebate given to concession card holders - will be doubled to $600.

Premier Mark McGowan also said the Government will spend $114 million to help small and medium sized businesses.

"We can afford to do these types of measures because we've got the budget under control," he said in a press conference on 16 March.

Payroll tax cuts will be brought forward to 1 July., and small businesses will also receive a one-off payment of $17,500.

Queensland Government stimulus

Most recently, the Queensland Government announced payroll tax relief for six months for SMEs (small-to-medium sized enterprises) if they've been affected by coronavirus.

This applies to companies with wage bills up to $6.5 million.

The policy will be backdated to 1 February - when a travel ban on travellers who have been in China took effect - according to Deputy Premier Jackie Trad.

"We’ve known from the start the impact of the virus is evolving, so our measures to address it must evolve as well," she said.

The Queensland Government in February also introduced a $27.25 million immediate assistance to help manage the impacts of the virus, including waiving certain fees and charges for SMEs in the tourism or hospitality industries, as well as various other small business measures.

One million dollars of that budget will also be dedicated to increasing student support services, helping them return to study as well as providing them health advice and other services.

South Australian Government stimulus

An 'unprecedented' response was announced on 11 March by the SA Government, with a stimulus package worth $350 million effective immediately.

The stimulus package primarily targets tourism, and infrastructure projects that will be brought forward.

Premier Steven Marshall said it was in direct response to the drought, bushfires and now coronavirus.

“While we are not immune from the impacts of this global crisis, this package will go some way to assist us minimise the inevitable shocks to come," he said.

“We are a team with a strong plan in place and our actions to date should fill the community with confidence, knowing they have a Government willing to do whatever it takes to manage these challenges."

However, opposition leader Peter Malinauskas criticised the Government's lack of specific detail or planning.

"The commitment of $350 million towards stimulus without any detail means it's very hard for business and households to get the confidence they need to continue to drive economic activity in South Australia," he said.

Tasmanian Government stimulus

The state government announced on 11 March it will release a stimulus package, but the finer details will not be known until the following week.

However, Premier Peter Gutwein said it will leverage the Federal Government's stimulus package.

He also said cash flow for small businesses would be a problem, and a downturn in the construction industry is possible.

What are the other states doing?

Most states are now covered, leaving only Tasmania and the ACT without anything concrete.

Tasmania

The state government announced on 11 March it will release a stimulus package, but the finer details will not be known until later

However, Premier Peter Gutwein said it will leverage the Federal Government's stimulus package.

He also said cash flow for small businesses would be a problem, and a downturn in the construction industry is possible.

Victoria

No statewide stimulus package has been announced at the time of writing but the Victorian Chamber has given all state businesses free access to its expert advice lines by waiving membership fees for two entry-level memberships and a $500 credit to existing members for training and services. 

Australian Capital Territory

Nothing has been announced but Chief Minister Andrew Barr said more should be done to look after those in the gig economy. 

In short, watch this space, especially if you're a Victorian living outside of Melbourne.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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author-avatar
Harrison joined Savings in 2020. He is a journalist with more than four years of experience, with previous stints at News Corp and financial comparison site Canstar. With a keen interest in personal finance, Harrison is passionate about helping consumers make more informed financial decisions.

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