Banks on board for new loans program

The Morrison government has announced the launch of a new $250-million stimulus package as part of its JobMaker program, aimed at breathing life back into the “creative economy”, which has been devasted by shutdown measures introduced in March to curb the spread of COVID-19.

The “targeted” stimulus program involves a range of new grant and loan schemes phased in over the next 12 months to rejuvenate the $1.2 billion entertainment, arts and screen sectors, which employ approximately 600,000 Australians.

The stimulus package includes:

• $75 million in grant funding in 2020-21 through the “Restart Investment to Sustain and Expand (RISE) Fund” to provide capital to support production and event businesses;
• $90 million in concessional government-backed “Show Starter” loans to assist creative economy businesses to fund new projects, delivered through commercial banks;
• $50 million for a “Temporary Interruption Fund”, administered by Screen Australia, to help local film and television producers secure finance;
• $35 million to provide direct financial assistance to support Commonwealth-funded arts and culture organisations; and
• the establishment of a ministerial taskforce to partner with the government and the Australia Council to implement the JobMaker plan for the creative economy.

Following the announcement, Prime Minister Scott Morrison commented: “Our JobMaker plan is getting their show back on the road to get their workers back in jobs.”

“We’re delivering the capital these businesses need so they can start working again and support the hundreds of thousands of Australians who make their living in the creative economy.

“These measures will support a broad range of jobs from performers, artists and roadies, to front of house staff and many who work behind the scenes, while assisting related parts of the broader economy, such as tourism and hospitality.”

He added: “Many in the sector will find a new way to operate while the current social distancing measures remain in place, and while that won’t be easy, I know there’s a strong desire among all Australians to see the return of gigs, performances and events.”

Guidelines for the new grant and loan programs are set to be released “in the coming weeks”, with members of the Creative Economy Taskforce also due to be announced.

The Australian Banking Association (ABA) has welcomed the new package, with members awaiting further detail regarding the $90-million concessional loans program.

The ABA has encouraged businesses interested in applying for the government-backed loans scheme to approach lenders and “flag their interest”.

This is the latest of several joint ventures between the federal government and credit institutions, which include the First Home Loan Deposit Scheme (FHLDS), the Australian Business Securitisation Fund (ABSF) and the SME Guarantee Scheme.

Lenders also have access to low-cost business funding via the Reserve Bank of Australia’s (RBA) $90-billion term funding facility, which will expire at the end of September.

[Related: Banks urged to dip into capital buffers to fuel lending]