Australian PM Tells Banks To Release Funds To Suffering Business

Australian Prime Minister Scott Morrison talks to the media at Parliament House on April 11, 2019 in Canberra, Australia.(Tracey Nearmy/Getty Images)

Australia’s Prime Minister Scott Morrison has urged the country’s four major banks to release funding for small businesses that have registered for its relief support package program, Jobkeeper.

“I am aware that there has been some frustration amongst businesses, in particular, in accessing bridging finance with banks. We are aware of that. I have no doubt the banks are aware of that as well and we need to be addressing that,” said Morrison in a joint interview with Treasurer Josh Frydenberg on April 23.

On April 24, Minister for Home Affairs Peter Dutton said on Channel 9’s Today Show that the prime minister was right to single out the banks for the behaviour.

“The banks have got a lot of stepping up to do,” Frydenber said, noting that although there had been a lot of cases where the banks have provided significant assistance, it needed to be more widespread.

Dutton added that the government had put in place the Jobkeeper program as a measure so the banks can offer such finance. “And they should and we need to look at the cases where they’re not and frankly, I think the banks should be publicly shamed,” he said.

On April 23, Frydenberg and tax commissioner Chris Jordan held a phone conference with the CEOs of ANZ, Westpac, Commonwealth Bank of Australia (CBA), and National Australia Bank (NAB). They emphasized the need for the banks to provide support to small businesses.

Frydenberg said the banks play a “vitally important role” in bridging the finance that these businesses need to help pay their staff until the first Jobkeeper payment is received in the first week of May.

According to the Australian Taxation Office’s (ATO) JobKeeper website, to be eligible for the program businesses have to continue to pay their staff after March 30, prior to receiving the payments. In order to facilitate this, the banking sector said they would open up bridging finance for businesses to cover their costs during the lockdown.

Banks Respond Quickly

Within 24 hours of the government’s comments, all four major banks had announced dedicated hotlines for their customers.

NAB CEO Ross McEwan responded to the governments’ comments on April 24 saying, “We strongly support the actions the Government is taking and our bankers are working overtime to provide assistance to the thousands of requests for help we’ve received so far.” McEwan announced a hotline for people to contact the bank.

ANZ CEO Shayne Elliot made similar comments: “ANZ is committed to helping those customers who need to fill an urgent short term funding gap while they wait for extraordinary financial support from the Government’s Job Keeper program.

“Our dedicated hotline and financial support for these customers is in addition to the range of measures we already have in place to support them, such as loan repayment deferrals and a 10% increase in overdraft accounts,” said Elliott.

Westpac took to Twitter to let their customers know their hotline details, writing that it had launched an assistance helpline for businesses.

https://twitter.com/Westpac/status/1253480580236247041

Commonwealth Bank also wrote on Twitter that they have responded to the need already, writing that they had already processed $340 million (US$216 million) in loans.

https://twitter.com/CBAnewsroom/status/1253188296416432128

The Australian Banking Association CEO and former Queensland premier Anna Bligh also said that from April 24 banks are bolstering their efforts to fast-track outstanding applications from businesses that are seeking funding to help pay their staff until the Jobkeeper payments begin.

This is “to receive the bridging finance necessary to pay their staff and to speed up the processing of these bridging applications to the front of the queue,” she said.