Australia wants to put global economy into ‘controlled hibernation’

Australia wants to put global economy into ‘controlled hibernation’

Australia’s Treasurer is urging the world’s top economies to make it a top priority to put the global economy into a “controlled hibernation” during the coronavirus crisis.

Josh Frydenberg had a second virtual meeting with G20 finance ministers overnight on Wednesday as the world grapples with how to control the economic fallout of the pandemic.

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Ahead of the meeting, Mr Frydenberg said the G20 action plan should signal three stages – putting the economy on ice while quarantine measures are in place, a promise to lead a co-ordinated global recovery once the health crisis recedes, and a long-term recovery plan.

Australia and other G20 nations struck a deal last Friday to co-ordinate efforts to tackle the coronavirus pandemic and collectively pledged $A7.5 trillion to kickstart the global economy.

Mr Frydenberg said quick, strong and co-ordinated action would minimise the permanent human and economic damage.

“Our priority should be putting the global economy into controlled hibernation while quarantine measures are in place,” he said.

“That is, finance the global health response, maintain financial stability, minimise job losses, keep businesses going, and ensure the basic needs of the global population are met.”

He wants to see a clear signal the G20 is doing whatever it takes, and for the International Monetary Fund to publish regular updates on the state of the global economy to keep efforts to stabilise it on track.

“The role of the IMF is critical. I propose the G20 Action Plan include a directive to the IMF to assess the adequacy of the global financial safety net,” he said.

“If more resources are required, then we need to know soon.” Mr Frydenberg reiterated Australia’s calls on G20 members to unblock global supply chains and not restrict trade, especially of vital medical supplies.

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