There is a lot of concern that at the end of September when the current deferral scheme and government support packages expire Australia is going to fall off of a “Financial Cliff.”
To save lives, governments moved quickly to stop the spread of coronavirus. 
When the economy was crushed by restrictions on movement and "normal life", extraordinary and expensive measures were put in place in March,
But the concern is that many of these had a 6 month life span.
For example, Australia’s banks have given six months’ grace to thousands of customers under their mortgage deferral scheme, which with the government’s JobKeeper program has enabled households to keep afloat since the pandemic took hold in March.
This generally meant the loan's term was extended by six months or just accrued the interest, but it gave mortgage holders breathing room.
The big question now is what happens when these schemes run out in September – because it is clear that the economic slump induced by the crisis has some way to run.
I can’t see the government which has spent so much time, money, effort and publicity building a “bridge” to get it across to the other side, to then allow us to fall off a cliff once we get there.
Currently Australian Prudential Regulation Authority (APRA) and the banking industry are in discussions about avoiding the catastrophic impact on the economy and the property market of a wave of foreclosures, particularly in the lead-up to Christmas.
Apparently a number of solutions are being examined including continuing the deferral schemes for another 6 months, lengthening the term of the loan, using redraw facilities, refinancing at a lower rate, or interest-only repayments.
APRA chairman Wayne Byres told a Senate committee last month that some bank customers would clearly be unable to repay their loans once their repayment deferrals expired, but…
“No one has an interest in going off the cliff, so we have to work out what the next phase is going to be and that will be dependent on the economic situation at the time.”
According to Australian Banking Association data, 779,458 loans worth $237billion have been deferred, including $176billion in mortgages and $60billion in business loans,
Customers are pausing their loan pauses
The banks have recently started customer check-ins to see if their circumstances have improved or deteriorated and a number of banks have reported that customers on deferrals had reversed their earlier decisions and resumed repayments. 
National Australia Bank chief executive Ross McEwan has said about 10-15 per cent of their customers who deferred loans have resumed payments
Last week Mark Hand, ANZ’s group executive of Australia retail and commercial said that about a third of ANZ customers who deferred loan repayments have recommenced paying down their debt.
“[We’re] seeing some customers call us to unwind the arrangement because they’ve got some certainty, they’ve got that confidence going forward,” he said.
At Westpac, more than 4000 home loan customers have cancelled their mortgage support package which included a three-month repayment deferral, with a further three months available on review.
These programs are scheduled to end in September:
The list of programs currently scheduled to finish at the end of September is extensive:
- Mortgage "pausing" for owner-occupiers and landlords, essentially stopping repayments (but interest still applies - it just gets deferred.)
- The JobKeeper wage subsidy covers 3.5 million workers, paying employers $70 billion to keep them at work.
- The coronavirus supplement of $550 a fortnight goes to a range of welfare recipients, including 1.6 million unemployed workers on JobSeeker.
- Wage subsidies for apprentices.
- Small-to-medium-enterprise loan guarantee, where the government backs 50 per cent of new loans issued by lenders.
- Subsidies for domestic air travel.
- A ban on rental evictions, if a person has lost income due to COVID-19.
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