News National Economic stimulus is coming, PM promises – but details remain secret

Economic stimulus is coming, PM promises – but details remain secret

scott morrison stimulus plan
The Prime Minister will say only that the package will be scalable and measured.
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The Morrison government is keeping details of its promised stimulus plan close to its chest, refusing to be drawn on details or even when the package will be revealed, despite data showing the economy is starting to struggle.

The stimulus package is expected to be a multibillion-dollar affair aimed at keeping business doors open and people employed after the summer’s bushfire crisis and as the coronavirus outbreak starts to have a wider effect on Australia.

On Friday, Prime Minister Scott Morrison would say only that the plan was being put together “swiftly” but not with “undue haste”.

“We have been careful to get this right, to make sure it is targeted, to make sure it is measured, proportionate, and importantly that it is scalable,” Mr Morrison said.

Earlier, Finance Minister Mathias Cormann also refused to be drawn on details, including the exact timing of the announcement of details – although he said it would be “well before” the May budget.

The government’s promises come as retail sales data released on Friday show the bushfires and thick, choking smoke that covered much of south-eastern Australia kept consumers at home.

Retail spending dropped 0.3 per cent in January after a downward revised 0.7 per cent slump in December. That was before any real awareness of the likely economic ramifications of COVID-19.

Treasury has estimated the bushfires will cut 0.2 percentage points from economic growth in the March quarter, compounded by what could be at least a 0.5 percentage point drag from the impact of the coronavirus.

Mr Morrison said on Friday he had struck a deal with the states and territories to go halves in the health costs from the virus – at this stage estimated at $1 billion.

“Today, we have been very decisive, to date we have been very proportionate,” he said.

“We will continue to see the disruptive impact of this in the months ahead and we want to leave ourselves in a position to continue to respond to that.”

He reiterated Mr Cormann’s assurances the stimulus package would be revealed before federal budget day.

Meanwhile, Tourism ministers met in Canberra on Friday to discuss the impact of the virus on the sector, which has also been rocked by the aftermath of the fires.

The government last week added Iran to the ban and, on Thursday, South Korean visitors. It also introduced enhanced screening for travellers from Italy.

In concluding its annual assessment of Australia, the International Monetary Fund has warned that downside risks to the near-term outlook “remain elevated” and have recently increased due to COVID-19.

“Growth should continue to recover in 2020, but it will take time for the economy to return to potential and restore inflation to within the (2-3 per cent) target range,” the Washington-based institution said overnight.

However, the report was concluded on February 21, and is already looking dated given world markets have since been volatile as the coronavirus spreads and central banks, including the Reserve Bank, have cut interest rates fearing a global downturn.

Responding to the IMF report, Treasurer Josh Frydenberg said Australia was approaching the challenges ahead from a position of “economic strength”.

-with AAP

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