Data released by the Australian Banking Association (ABA) shows that banks are escalating their assistance to consumers and businesses in an economy battered by the coronavirus crisis.
More than 320,000 Australian homeowners have been extended mortgage payment deferrals. And nearly 37,000 consumers have benefited from payment deferrals on their personal loans and credit cards.
At the same time, some 170,000 business owners have been granted reprieve on business loan repayments.
The banks are also scrambling to make money available to businesses as quickly as possible. So far, they have provided more than $28.8bn (AUD 45bn) in new loans. And another $3.8bn (AUD 6bn) through increases to existing loans and credit facilities.
ABA’s chief executive officer Anna Bligh said:
“Supporting and helping businesses to grow is vital for the success of any economy. The actions of banks will help inject much needed investment into the economy, with the deferrals, new lending and increased credit, allowing people and businesses to spend on the things they need.”
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A second stimulus package is on the way
The financial concessions are part of a national strategy aimed at stabilising the economy, which analysts forecast could shrink by 6 per cent this year compared with 2019.
State governments are also preparing relief measures for tenants in rental properties. Scott Morrison, Australia’s prime minister, said landlords would be among those who “are going to make sacrifices ahead”.
Mr Morrison said the government would unveil the second fiscal stimulus package within days aimed at cushioning the financial blow to citizens who are facing their first recession in Australia for almost three decades.
Indeed, Australia has enjoyed 29 years of growth without recession. However, the rapid spread of the virus has forced the government to shut its borders and progressively tighten restrictions on gatherings.
As we go to press, Australia has so far reported 6,894 coronavirus cases, with 757 active cases (currently infected patients). 97 people have died from the infection.
ABA CEO Anna Bligh – How Banks Can Help during COVID-19: