SYDNEY — The Australian government will on Monday promise to subsidize employee wages for up to six months, two sources familiar with the plan said, as it seeks to shelter the country’s economy from the impact of the global coronavirus pandemic.
Australia has ramped up social distancing measures in recent days, restricting public gatherings to just two people and shutting down clubs, gyms, beaches and parks, as it seeks to capitalize on a slowdown in the growth rate of new infections nationally.
Officials in several states will bring in penalties from midnight including fines of up to A$1,600 and the potential of a six month jail term for anybody found breaching the new rules.
“That stabilization of numbers is what we are looking to do, that flattening of the curve so that we can have enough hospital and intensive care resources to use over the coming weeks if indeed we need those,” Deputy Chief Medical Officer Paul Kelly said. “But this is not a time to take the foot off the brake.”
While the social distancing measures appear to have helped slow the spread of the virus, the shut down of businesses across the country has led to swiftly rising unemployment and sharply falling consumer spending.
Economists expect the country’s A$2 trillion ($1.23 trillion) economy to slip into its first recession in almost three decades because of the pandemic.
Two sources with knowledge of the package to be announced on Monday said it would provide funds for six months. Australian Treasurer Josh Frydenberg declined to provide specifics ahead of the official announcement but said it would accelerate the country’s economic rebound.
“It is about providing additional income support and keeping employees connected to their employer, because once we get to the other side of this we want the recovery as speedy as possible,” Frydenberg told the Australian Broadcasting Corp, which reported the package will pay businesses A$1,500 every fortnight per employee.
Prime Minister Scott Morrison’s government and the country’s central bank have already announced stimulus packages worth around A$190 billion as the country heads for its first recession in almost three decades.
Australia’s regulators and banks have also taken measures to pause loan repayments for six months, hoping to “hibernate” businesses until the crisis ends.
Australia has one of the lowest number of coronavirus infections globally and reported that the rate of new infections has halved in the past week. Around 4,200 people have tested positive nationally, and the death toll stands at 18.
Still, officials have warned against complacency as they tightened social distancing restrictions, saying the new measures were needed to capitalize on the slowing growth rate.
As well as imposing the two-person limit on public meetings, the small island state of Tasmania became the country’s first state to ban people from alternating between their main home and any second home.
“There will not be movement between your shack and your primary place of residence, allowing you to alternate and sleep nights in both,” Tasmania Premier Peter Gutwein said, using local slang for holiday homes.
The island state reported its first coronavirus death overnight.
At the country’s international airports, police oversaw the transfer of Australians returning home to hotels or other facilities for monitored quarantine for 14 days. The majority of Australia’s coronavirus cases have been imported.
In Western Australia state, hundreds of people were due to be taken from the Vasco da Gama cruise ship to Rottnest Island, a tourist destination near Perth, or hotels near the state capital of Perth for quarantine, ship owner Cruise & Maritime Voyages said.
The danger posed by cruise ships has loomed large in Australia after passengers who were allowed to disembark the Ruby Princess liner in Sydney without any medical checks were later diagnosed with COVID-19.
($1 = 1.6289 Australian dollars) (Reporting by Jonathan Barrett, Byron Kaye and Colin Packham; Editing by Daniel Wallis and Jane Wardell)