GRACosway Weekly Wrap Up: Stimulus package unveiled
- The Federal Government has unveiled a $17.6 billion fiscal stimulus package designed to stave off a recession amid growing concern about the economic impact of coronavirus.
- The PM used a rare televised address to the nation on Thursday evening to reassure Australians that the Government is well-prepared to deal with the coronavirus pandemic.
- New travel bans have been announced for those travelling from Italy, while existing bans on travellers from China, Iran and South Korea have been extended.
- The Federal Government announced $2.4 billion in funding for health measures to address coronavirus, including ‘fever clinics’ and a hygiene-related marketing campaign.
- The Government has announced bushfire-affected small businesses will be offered $10,000 grants while also pledging to make existing loans and other services easier for businesses to access.
- Opposition Leader Anthony Albanese has called on the Government to bring forward the next Federal parliamentary sitting week to deal with legislation addressing coronavirus.
- A legal expert has this week told the inquiry into the ‘sports-rorts’ scandal there are “serious doubts” over Senator Bridget McKenzie’s authority in administrating the controversial grants program.
- Minister for Finance Matthias Cormann confirmed there will be no budget surplus for 2019-20.
- Senate President Scott Ryan has announced he will step down from politics at the next election, saying “constant renewal is essential for every political party”.
Government announces stimulus
PM Scott Morrison and Treasurer Josh Frydenberg have announced a $17.6 billion fiscal stimulus package in a bid to prevent the Australian economy from sliding into recession due to the economic fallout caused by the coronavirus. The PM said the package is designed to keep Australians employed and will ensure businesses can confront cash flow challenges and impacts from the coronavirus crisis. The total cost of the package will be incorporated into both the current budget and forward estimates, with $11 billion of the stimulus set to be spent before 30 June this year.
The stimulus package includes six temporary measures:
- $700 million to increase the instant asset write-off from $30,000 to $150,000
- $3.2 billion to accelerate asset depreciation deductions over the next 18 months
- $6.7 billion worth of payments to small and medium sized businesses to boost cash flow
- $1.3 billion in subsidies to encourage small business employers to retain apprentices
- $4.8 billion for one-off stimulus payments of $750 to eligible households
- $1 billion in support for sectors and regions most affected by the virus
Economists have welcomed the package, stating the injection into the economy should be enough to prevent a recession. Treasurer Josh Frydenberg said that modelling by Treasury indicates the stimulus package will add 1.5 percentage points to growth in the June quarter. Opposition Leader Anthony Albanese said Labor supports the Government’s stimulus measures and will endeavour to be constructive and responsible in expediting legislation through Parliament where required, however warned that it remains to be seen whether the measures will be enough to prevent a serious downturn. The coronavirus response is expected to dominate today’s COAG meeting.
Meanwhile, the World Health Organisation (WHO) has declared the coronavirus a global pandemic, citing the “alarming levels of spread and severity” of COVID-19. The new classification comes as Australia extended its travel ban to Italy, which is currently experiencing the largest coronavirus outbreak outside of mainland China. Minister for Foreign Affairs Marise Payne has left the door open for further travel bans for affected countries, and has advised Australians to reconsider overseas cruises. The Minister’s advice comes as the United States announced a ban on travel from 26 European countries, excluding the United Kingdom. Following this announcement, PM Scott Morrison asked Australian health officials to review travel from Europe, however reports indicate that such a ban has not been recommended at this stage.
The Federal Government also unveiled a $2.4 billion health package to address the spread of coronavirus. The package includes the establishment of up to 100 ‘fever clinics’ across the country in addition to a $30 million hygiene advertising campaign and an additional Medicare item for telehealth consultations.
Overhaul of bushfire support
Elsewhere, Minister for Emergency Management David Littleproud has announced bushfire-affected small businesses will be offered $10,000 grants following criticism it was taking too long to deliver loans and grants under the $2 billion bushfire recovery fund. Minister Littleproud said the programs will be rolled out quicker, with 71 more workers on hand to help applicants complete paperwork.