SYDNEY — Australia’s Prime Minister Scott Morrison will on Sunday pledge an additional A$66.4 billion ($38.50 billion) in fiscal stimulus in a bid to shelter the country’s economy from coronavirus, according to excerpts of a speech seen by Reuters.
Australia’s conservative government last week said it would pump A$105 billion its economy, supplementing Canberra’s original stimulus worth A$17.6 billion.
But as the number of coronavirus cases in Australia tops 1,000, Morrison will say that his government will spend another A$66.4 billion to safeguard jobs, while a third economic stimulus package is likely.
“There is a lot of pain coming but we’re going to cushion the blow as best we can,” Morrison will say when he announces the second economic package.
Although the full details of the package are still unclear, Morrison is expected to promise that his government will give local businesses A$100,000 if the company has a turnover of less than A$50 million each year.
Morrison will also say that Australia will also underwrite 50% of up A$40 billion in loans offered by local lenders to small and medium sized companies.
Australia’s conservative government is also likely to boost unemployment benefits as companies are forced to lay off staff.
One of Australia’s largest employers, Qantas Airways last week said it would put 20,000 employees on leave as coronavirus sees scores of countries close their borders.
Desperate to cushion the blow to the national economy, the Reserve Bank of Australia last week cut its benchmark interest rate to an historic low, and issued its first ever quantitative easing program as it seeks to prop up the domestic economy.
But many economists expect the jobless rate to reach 7% by October, up from 5.3% last month, as Australia records its first recession in nearly 30 years.
The stimulus package, parts of which require parliament’s approval, will be the country’s first stimulus package since the 2008 global financial crisis, which helped Australia avert a recession then.
($1 = 1.7247 Australian dollars) (Reporting by Colin Packham, editing by Louise Heavens)