The federal government will extend the International Freight Assistance Mechanism and the SME Loan Guarantee Scheme as part of a new $1.2 billion support package.
The extensions were announced as part of the government’s bid to stimulate tourism and trade, with COVID-19 impact still being felt in the industries.
Federal Treasure Josh Frydenberg said the SME Loan Guarantee Scheme would be extended and expanded, allocating up to $40 billion in lending to small and medium enterprises. The scheme will be renamed SME Recovery Loan Scheme now be tailored to businesses that have been relying on JobKeeper during the March quarter.
Changes are:
- increased government guarantee from 50/50 split between government and the banks to 80/20;
- increased size of eligible loads from $1million to $5 million;
- increased maximum eligible turnover from $50 million to $250 million;
- increased maximum load terms from five to 10 years;
- a repayment holiday of up to 24 months; and
- allowed to use the scheme to refinance existing loads.
Frydenberg said more than 350,000 JobKeeper recipients would be eligible under the expanded scheme. “The expansion and extension of the loans will back businesses that back themselves and will help businesses who continue to do it tough build a bridge to the other side of the crisis and keep their staff employed,” he said.
The International Freight Assistance Mechanism (IFAM) was implemented in response to COVID-19 to maintain global air connections and international market share for Australian exporters.
It has helped reconnect Australia to almost 70 international locations and the movement of more than 380,000 tonnes of high-value perishable products on more than 11,000 flights.
Prime Minister Scott Morrison announced the extension of the program to 30 September 2021, to support the sector until the COVID-19 vaccination rollout is well underway.
Air freight was particularly hard hit by the pandemic. In Australia, 80 per cent of its airfreight is carried on passenger flights. COVID-19 saw the country’s commercial passenger flights drop by more than 90 percent almost overnight.
The government established a network of 15 freight forwarders and air freight service providers to deliver the IFAM.
On outbound flights, perishable products with important and established international customers have been prioritised. Seafood (including lobsters), premium red meat, dairy (fresh milk and yoghurt), and premium fruits, packaged salad or vegetables are top of the list.
The Australian Meat Industry Council (AMIC) has welcomed the announcement, calling the extension a “shot in the arm”.
AMIC CEO Patrick Hutchinson said it would help the whole Australian red meat supply chain, including exporters, processors, lot feeders and farmers at a critical time. “The industry is facing a range of key issues including worker shortages, a slow start to exports for 2021 and lack of livestock suppl,” Hutchinson said.
From March 2020 to February 2021, meat exports via IFAM included 40,000 tonnes of sheep meat, 27,000 tonnes of beef, 9000 tonnes of pork, with 340,000 tonnes total volume of produce valued at $4.9 billion.
“The extension of IFAM provides ongoing recognition of the importance of airfreight supply chains in delivering highly valuable, and perishable, protein to international markets,” he said.
For more information on the loan scheme here.
For more information on IFAM click here.
