The Coronavirus (COVID-19) pandemic is a once in a 100-year health crisis which has already smashed the Australian and global economies and changing life as we know it.
The Reserve Bank of Australia has cut official interest rates to an all-time low of 0.25 per cent in an emergency response to the crisis and offered a $90 billion lending facility to banks for small business. The RBA also announced quantitative easing measures, including the purchase of government bonds.
The RBA and governments are working to keep as many Australians as possible employed with the Federal Government looking to implement significant stimulus measures.
Banks are offering a six-month deferral on business and home loan repayments. We are encouraging clients to make it a priority to approach their bank if they are in need of hardship assistance.
But I emphasise the importance of acting early. As the days and weeks go on and the situation deteriorates further, banks will become inundated with customer calls relating to hardship. Don’t leave it until you’re down to your last dollar.
If you seek assistance, don’t expect to maintain current lifestyles and luxuries. You may need to cut back on the non-essentials and focus on surviving through the next six to 12 months. Make sure you prioritise home loan and rent repayments when budgeting.
Expect additional announcements in the coming weeks from government and banks to provide further support through this period. The Australian Taxation Office (ATO) has also announced a series of administrative concessions to assist businesses impacted by COVID-19, which include deferring by up to four months the payment of tax amounts due through the BAS (including PAYG instalments), income tax assessments, FBT assessments and excise by affected businesses.
Don’t leave seeking assistance from your lender until the last minute. Seek financial advice from those qualified to give it, such as a finance broker.