GRACosway Weekly Wrap Up: Economic stimulus on the way
6 March 2020
- The Reserve Bank of Australia has cut the official cash rate to a record low of 0.5 per cent.
- The Government is preparing to unveil an economic stimulus package to bolster the Australian economy in the wake of the Coronavirus outbreak.
- Attorney-General Christian Porter flagged the Government may activate biosecurity laws that could see Coronavirus patients forcibly detained as a “last resort”.
- Coronavirus travel bans are now in place for China, Iran and South Korea, while enhanced screening measures will be introduced for travellers from Italy.
- Australia’s economy grew by 0.5 per cent in the December quarter before the onset of bushfires and Coronavirus, while annual economic growth reached 2.2 per cent over the past year.
- PM Scott Morrison flagged an overhaul of bushfire assistance in a bid to fast-track payments to small businesses.
- Australia’s newswire service – Australian Associated Press – will close in June after 85 years in operation, claiming around 600 jobs.
- Home Affairs Minister Peter Dutton has been criticised for suggesting that New Zealand PM Jacinda Ardern raised concerns about Australia’s deportation laws as an election tactic.
PM calls for calm
Prime Minister Scott Morrison has called for calm amid escalating concern over the spread of Coronavirus. Supermarket shelves were left bare in many places across the country as shoppers started stockpiling essential items, prompting the PM to contact major supermarkets about their supply chain arrangements. With the first cases of person-to-person transmission recorded in Australia this week, the Government has flagged that it may need to use biosecurity laws to direct people suspected of carrying the virus to remain in lock down. Attorney-General Christian Porter said the laws may be “strange and foreign” to many Australians and will only be used as a last resort.
Travel restrictions extended
The Government has expanded the Coronavirus travel ban to include South Korea, in addition to extending the existing ban on foreign nationals travelling from China and Iran. The restrictions will be in place until Saturday March 14 and will be assessed on a weekly basis by the National Security Committee of the Cabinet. The Government also announced enhanced screening measures for those travelling from Italy, including further questioning at check-in and temperature checks upon arrival in Australia. Chief Medical Officer Professor Brendan Murphy said that it is no longer possible to completely prevent people with the virus from entering Australia and the focus is now on slowing the spread of the disease to ease pressure on the healthcare system.
Stimulus package expected
The RBA cut the official cash rate to a record low of 0.5 per cent on Tuesday in an attempt to cushion the economy from the impact of Coronavirus. All four of Australia’s big banks passed the interest rate cut on in full, following phone calls from Treasurer Josh Frydenberg. The Government is also preparing to announce a multi-billion dollar economic stimulus package which will reportedly focus on jobs and small business cash flow and is expected to be unveiled next week. Economists expect one further rate cut in April; RBA Governor Philip Lowe has previously indicated that the central bank may consider unconventional monetary policy measures if rates hit 0.25 per cent.
Government under spotlight in estimates
In Canberra this week, the Opposition used Senate estimates to continue questioning the Government over the ‘sports rorts’ controversy. It was revealed that nine projects worth $3.3 million were approved after the 2019 election was called and the Government had entered caretaker mode. It also emerged that the Prime Minister’s office requested for one project to be added and another removed from the list after parliament had been dissolved. Sport Australia conceded the agency had suffered “reputational damage” in the wake of the saga, while Opposition Leader Anthony Albanese accused the PM of misleading the Australian public. Meanwhile, the Government has flagged an overhaul of the delivery of bushfire assistance in a bid to speed up payments to small businesses. Prime Minister Morrison acknowledged the program was not going the way the Government had hoped it would and confirmed a “repackaging” effort is underway to fix the problems for small businesses.
Parliament will sit in WA next week, while NSW will hold its second week of Budget Estimates.