The Morrison government is signalling it won’t pay income support to states that stay shut past the 80% vaccination threshold

The Morrison government is signalling it won’t pay income support to states that stay shut past the 80% vaccination threshold
Prime Minister Scott Morrison is demanding states stick to the national plan to reopen.(Sam Mooy, Getty Images)
  • The federal government will cease funding income support measures as each state hits its 80% vaccination target.
  • Pushing the country to live with COVID-19, Treasurer Josh Frydenberg signalled states will have to pay their own way if they choose not to reopen.
  • It heaps pressure on Queensland and Western Australia, which look to be the last to open back up.
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State governments will risk blowing a hole in their budgets should they resist pressure to reopen, after the federal government signalled it will soon turn off the funding taps.

Having forked out $9 billion in income support for New South Wales, Victoria and ACT residents over the last few months, the Morrison government has told state governments they’re on their own once they reach their 80% vaccination target.

“As I have said before, we can’t eliminate the virus – we need to learn to live with it in a COVID-safe way. This means we must ease restrictions as vaccination rates hit 70% [and] 80%, in accordance with the plan agreed at national cabinet,” Treasurer Josh Frydenberg said in a statement given to the AFR.

Frydenberg noted that taxpayers had already spent $13 billion on the “delta outbreak alone”, which emerged in Australia in June.

The COVID-19 Disaster Payment, worth up to $750 per week, has effectively replaced the JobKeeper and JobSeeker measures that ended in April of this year and mitigated economic damage during tough lockdowns.

The decision will force premiers to either reopen, as New South Wales plans to do, or fund their own support measures, threatening to blow out their own budgets.

Both Victoria and the ACT are on slower reopening trajectories, with Premier Dan Andrews claiming the prime minister had prioritised vaccines for New South Wales and disrupted supply to other states.

Queensland has gone out on its own to pin reopening on 90% of constituents being fully vaccinated. Just halfway there as of Wednesday, it is unclear whether or not it will achieve that milestone before the end of the year.

With one in 11 Queensland jobs dependent on tourism, it may heap further pressure on Premier Annastacia Palaszczuk to bring the timeline forward.

Similarly, Premier Mark McGowan has said he won’t open Western Australia up until 2022, despite projections suggesting the nation will hit an 80% vaccination rate by mid-November.

It has pitted those within National Cabinet at loggerheads, as Australia considers how quickly it will be able to reopen businesses as well as state and international borders.

The inconsistency between governments has forced Qantas to scrap Perth flights to Sydney and Melbourne until April next year. Meanwhile, the carrier’s much-lauded non-stop flight between London and Perth has been re-routed via Darwin for the time being.

With a desire to put two years of lockdowns and border disputes behind it, the Morrison government may hope renewed financial pressure will be enough to bring states to the table.