March 10, 2020 05:55:29
The economic impact of coronavirus on Australia could be greater than that of the global financial crisis, the Prime Minister will warn, as he prepares to unveil a stimulus package designed to stop Australia from sliding into recession.
The Government’s fiscal response aims to protect the budget and economy during the coronavirus crisisThe stimulus package will be targeted to address specific sectors and issues Mr Morrison will argue measures must be temporary and come with an exit strategy
Scott Morrison will reveal some details of his closely-guarded support package in Sydney today, when he delivers a keynote speech at the Australian Financial Review Business Summit.
He will also argue that while COVID-19 is a global health crisis, it will have real and significant economic impacts for Australia, potentially greater than the global financial crisis.
“The epicentre of the crisis is much closer to home,” he will say.
“The [global financial crisis] impacts were centred on the North Atlantic and back then China was in a position to cushion the blow.”
There has been a long debate over whether Labor’s fiscal stimulus package, or China’s demand for Australian resources, saved the Australian economy at that time.
While the pace of economic growth slowed, unemployment rose and there was a period of heightened uncertainty, Australia did not experience a financial crisis or large economic downturn during the global financial crisis.
This time, Mr Morrison will argue the Government’s fiscal response will protect the budget and economy during the coronavirus crisis.
“When the economy bounces back, our budget will also bounce back. The stronger the recovery, the stronger the economy, the stronger the budget.”
Guiding the Government’s fiscal response to COVID-19 will be seven main principles, Mr Morrison will tell the summit.
One is that the stimulus package needs to be targeted to address specific sectors and issues, rather than Kevin Rudd-style cash payments for everyone, while keeping employees in jobs, businesses open, consumer confidence up and households spending.
He will also argue the measures must be temporary and accompanied by an exit strategy, to ensure the budget isn’t kept “under water”.
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The response will also be aligned with other arms of policy and Governments.
“Whatever you thought 2020 was going to about, think again,” he will tell the summit.
“We now have one goal in 2020 — to protect the health, wellbeing and livelihoods of Australians through this global crisis, and to ensure that when the recovery comes, and it will, we are well positioned to bounce back strongly on the other side.”
Ministers convene talks about wages and toilet paper
Unions, Federal Labor and employee groups have raised concerns casual workers without entitlements will lose their income if they are forced to stay at home due to quarantines.
Business groups are also worried stores will be forced to shut their doors for weeks.
The Attorney-General and Industrial Relations Minister Christian Porter will hold a roundtable on Tuesday morning to discuss these concerns.
The following day, Industry Minister Karen Andrews will hold an industry meeting to discuss the impact of the coronavirus on emerging supply chains.
For weeks, shoppers have been stockpiling groceries such as toilet paper, masks, sanitiser, dried goods, handwash and flour.
Industry groups have argued many supermarkets want to increase the level of stock they have, but there are issues that make it difficult, like delivery restrictions.
Mr Morrison will seek to assure the public that while the Government works out the details of its stimulus package, it will be business as usual.
“We face this challenge with our greatest asset undiminished — that is, the common sense, resilience and ingenuity of the Australian people,” he said.
“Australia will pass this test and emerge stronger on the other side.”
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