Massive economic stimulus to fight virus

Matt Coughlan
(Australian Associated Press)


A second round of major economic stimulus is on the way as the government looks to bolster the ailing tourism and hospitality sectors under pressure from coronavirus.

The Morrison government is mulling a fresh suite of measures to add to its $17.6 billion package announced last week.

Finance Minister Mathias Cormann said the government was looking at unprecedented measures to help Australia through the spread of the global pandemic.

“The grim reality is some businesses will close and some Australians will lose their jobs,” he told Sky News on Tuesday.

Senator Cormann noted the hospitality and tourism sectors would be among the hardest hit.

“We are focused on supporting those businesses and workers most affected by the downturn of the coronavirus,” he told the Seven Network.

There’s also concern about aviation after Qantas cut international flights by 90 per cent and domestic routes by 60 per cent.

Tourism Minister Simon Birmingham isn’t ruling out a bailout to stop Qantas and other carriers from going under.

“A strong airline sector is not negotiable in terms of being a part of Australia’s recovery,” he told reporters on the Gold Coast.

He said the major airlines had assured him strong cash reserves meant they were well placed to survive.

Shadow treasurer Jim Chalmers called for urgent action to help Qantas, Virgin and other carriers through the huge drop in passenger numbers.

“We will be very supportive of the government if they come out with a decent package of support for the airlines,” he told Sky.

Senator Cormann raised the prospect of Qantas and Virgin workers being used to help surging demand at the big supermarkets.

The government is concerned all jobs in the tourism sector – which account for one-in-13 workers – are on the line.

Labor will back the government’s stimulus measures when they hit parliament next week.

But the opposition has criticised the coalition for not doing enough for casual workers, sole traders and childcare employees.

“Clearly the first stimulus package that the government announced last week was too small and too slow,” Dr Chalmers said.

Labor’s focus on casuals comes as unions agitate for the government to give all workers the equivalent of two weeks’ leave.

On Tuesday, the public service commission confirmed casual workers required to self-isolate or afflicted with coronavirus will get access to paid leave.

The government’s initial package targeted relief for small and medium businesses, along with cash payments to people on welfare.

The NSW government on Tuesday announced a $2.3 billion stimulus package, with $700 million for healthcare and $1.6 billion for job creation and tax relief.

Meanwhile, the Reserve Bank predicts a 10 per cent drop in services exports during the March quarter because of a steep decline in inbound arrivals.

“This effect alone was expected to lower Australian GDP growth by around 0.5 percentage point in the March quarter,” minutes from the RBA’s most recent meeting note.

“Tourism and education exports were expected to remain low in the June quarter, before returning to their previous levels over the second half of the year as the Chinese economy recovers and travel resumes.”

The estimate does not include potential supply chain disruptions and further measures to stop the spread of the virus.


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