NSW councils will get up to $1,500 per employee per fortnight for the next three months to prevent local government job losses.

It’s part of a $395 million NSW government economic stimulus package for councils in response to the coronavirus pandemic, the largest of its kind offered by any state government.

Local government minister Shelley Hancock said the job retention allowance, which is capped at $112.5 million, will make up for local government being left out of the Commonwealth JobKeeper payment.

“It will safeguard valuable council jobs and ensure staff with a wide range of skills and experience are retained,” she said in an email to councils.

Individual councils will be able to decide which staff are most in need of the allowance and its delivery will be in line with the splinter award negotiated earlier this month, she said.

Emergency Services Levy relief

The state government will also fully fund the $32.8 million increase in the Emergency Services Levy, Ms Hancock said, in recognition that councils can’t afford the hit after suffering a triple whammy of pandemic, drought and bushfires this year.

The package also includes a $250 million increase in low-cost loans via the public sector borrowing facility TCorp.

TCorp will also offer principal and interest payments deferrals on existing council loans for the next six months, on request.

“This funding injection enables councils to redirect funds to critical core services and deliver much-needed financial support for local communities,” Ms Hancock said on Sunday as she announced the measures.

Treasurer Dominic Perrottet said the funds would help keep local government workers in jobs an help them bounce back from coronavirus.

Peak welcomes announcement

The state’s local government peak has welcomed the funding but says it will seek to extend the job retention allowance to six months in line with JobKeeper.

LGNSW will also seek to extended TCorp’s loan eligibility criteria, President Linda Scott said.

She said the job retention allowance would save tens of thousands of local government jobs and drive a locally-led recovery in NSW.

“Local government funding assistance is key to managing the economic impacts of COVID-19 and protecting essential services. Councils are eager to play their part in a locally led recovery,” Cr Scott said.

“This funding will ensure tens of thousands of people who make up our invaluable local government workforce will continue to be employed, delivering essential services such as street cleansing, providing support to communities and small businesses, especially those most vulnerable during this pandemic.”

However the state opposition said the $250 million worth of council loans should have gone straight to shovel ready projects instead of being allocated to councils.

“A greater debt burden will not see the local government sector emerge successfully from the coronavirus crisis, opposition local government spokesman Greg Warren said.

The state government has previously announced $82 million to support council run childcare centres and $25 million for local infrastructure.

The Office of Local Government will provide more detains about the funding package in coming weeks.