Another trickle of bushfire fiscal relief

Via the AFR:

The Morrison government will announce on Monday a tripling in the size of cheap loans and grants for any small businesses hit by the bushfires, in a move that will put pressure on the thinning budget surplus.

The decision could blow emergency funding out beyond the extra $2 billion announced for the disaster a fortnight ago and follows Prime Minister Scott Morrison’s meetings with small business leaders last week.

The government will announce loans of up to $500,000 to any business that has suffered asset or revenue losses from the fires, in an attempt to regain political ground after taking a hit in the polls over its response to the fire crisis.

The loans, an increase from the $130,000 in some states, will be for up to 10 years with interest rates of just 0.6 per cent and repayment holidays of up to two years. They will be complemented by a tripling in the size of available cash grants – from $15,000 to as much as $50,000.

That could be material. The AFR reckons 200k business have been impacted. If they all borrow $50k then that’s $10bn and bye, bye surplus. Though how many punters will want to leverage up after having assets wiped out is an open question. I expect the deployment will be sluggish.

It is better than this effort though, via Nine:

The Morrison government is further dipping into its $2 billion National Bushfire Recovery Fund, announcing an initial $76 million tourism recovery package.
The initiative aims to protect jobs, small businesses and local economies by getting tourists travelling in Australia again.
Tourism minister Simon Birmingham said getting people back into fire-affected communities was crucial, as well as driving tourism across the country.

Might as well try, I suppose, but I fear for tourism and students. Global editorial coverage of the fires has been disastrous.

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