A second round of major economic stimulus is on the way as the federal government looks to bolster the ailing tourism and hospitality sectors under pressure from the coronavirus pandemic.
The new national cabinet, comprising Prime Minister Scott Morrison and state and territory leaders, was to meet late on Tuesday to firm up details of the stimulus plans, which come as the number of people testing positive to COVID-19 rose again.
Victoria had 23 new cases overnight on Monday (now 94 cases) and NSW had 39 in the past 24 hours, bringing its total to 210.
As of 2pm on Tuesday, Australia had 377 people testing positive to the deadly virus, with the death toll remaining at five.
Among them was the country’s third federal politician, with NSW Liberal senator Andrew Bragg confirming he had contracted coronavirus.
On Tuesday, Finance Minister Mathias Cormann said the proposed stimulus package, off the back of a $17.6 billion package announced last week, was in line with unprecedented measures to help Australia through the spread of the global pandemic.
Senator Cormann warned the “grim reality” was that some businesses would close because of the economic fallout from the coronavirus pandemic, noting hospitality and tourism would be hit hard.
“The grim reality is some businesses will close and some Australians will lose their jobs,” he told Sky News on Tuesday.
“We are focused on supporting those businesses and workers most affected by the downturn of the coronavirus,” he told the Seven Network.
Meanwhile, NSW residents have been offered a further financial lifeline, with Premier Gladys Berejiklian announcing a $2.3 billion stimulus package, consisting of $700 million for healthcare and $1.6 billion for job creation and tax relief.
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 would not rule out a bailout.
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Senator Cormann raised the prospect of Qantas and Virgin workers being used to help surging demand at the big supermarkets.
Labor will back the government’s stimulus measures when they hit parliament next week.
On Tuesday, the public service commission confirmed casual workers required to self-isolate or afflicted with the coronavirus will get access to paid leave.
Reserve Bank predictions
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.
Major features of the state’s stimulus package include capital works investments, payroll tax relief and waiving charges and licence fees for small businesses.
There has been $700 million earmarked to ramp up COVID-19 testing, establish dedicated fever clinics and double intensive care capacity.
“Our approach in relation to dollars in NSW will be first and foremost to save lives. I don’t ever want to look back and think we should have done more,” Ms Berejiklian said on Tuesday.
“I don’t want to look back and say, ‘Why didn’t we give health what they asked for?’. So the Treasurer went to health and asked what they need.
“I want a no-regrets policy.”
Health Minister Brad Hazzard said the state was on track to experience a “substantial exponential increase” in coronavirus infections.
The number of confirmed cased of COVID-19 in NSW almost doubled over the weekend. On Tuesday morning, it reached 210.
Mr Hazzard on Monday said the virus “has very much a mind of its own”.
“It knows that at the moment across the world it’s winning the battle, here in NSW I think we’re holding the line, but we still need to do a lot more work as it evolves,” he told reporters in Sydney.
Meanwhile major public events across the state continue to be cancelled or postponed.
- Sydney Opera House performances cancelled until March 29
- Australian Fashion week at Sydney’s Carriageworks cancelled
- Splendour in the Grass, which was scheduled for July in northern NSW, postponed until October
- Groovin the Moo music festival cancelled outright