Treasurer readies multi-billion stimulus

Katina Curtis, AAP Senior Political Writer
(Australian Associated Press)

 

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The federal government is eyeing a substantial stimulus package to help Australian businesses and workers through the coronavirus crisis but how that affects its much-touted return to surplus won’t be clear until May.

Treasurer Josh Frydenberg said on Monday the support would be delivered using existing tax and transfer systems, which takes in welfare payments, family assistance and pensions.

He described the package under consideration as “substantial” – an upgrade from what he and Prime Minister Scott Morrison have said previously would be a modest or measured response.

“It will be designed about getting support to those who need it but also we won’t undermine the structural integrity of the budget,” Mr Frydenberg told reporters in Canberra.

“It won’t undo all of the good work that we’ve done over the last six-and-a-half years to get the budget back on track.”

However, that bottom-line impact might not be fully known until May, with the treasurer saying forecasts wouldn’t be updated until budget night.

The share market shed nearly six per cent – about $120 billion – on Monday’s opening amid ongoing panic over the impact of coronavirus and an oil price plunge.

Mr Frydenberg sought to calm things, saying market volatility was not uncommon in times like this and there were a number of factors at play.


Business is calling for tax relief and a regulation and red tape “holiday”.

The government may consider reducing deeming rates for pensioners, giving local councils funding for small projects and an expansion of instant asset write-offs for businesses.

Unions will also use a meeting with Industrial Relations Minister Christian Porter and employer groups on Tuesday to ask for compensation for casual workers who don’t get paid sick leave.

ACTU secretary Sally McManus said the package must address the financial risk to Australia’s 3.3 million casual workers in retail, hospitality, health and aged care, who will lose pay if they have to take weeks off work.

“We don’t want people with virus or people with symptoms going to work, but they are going to have to choose between paying the bills and feeding themselves or going to work,” she told Nine’s Today program.

Mr Frydenberg said the government was very conscious of people’s concerns about their job security.

“Our focus is ensuring that businesses are flexible, given the stresses and the strains that we will see as a result of the spread of the coronavirus,” he said.

Shadow treasurer Jim Chalmers said there was a lot of anxiety among Australians about the economic impact of the virus.

Labor’s frontbench will consider its stance on the government’s plan soon after the detail is announced, but Dr Chalmers said it was inclined to be constructive and supportive.

“We also have a responsibility to point out if we think the package that they announce is insufficient or deficient in any way,” he told reporters in Brisbane.

“We need to make sure that whatever the government announces is not too little too late. We need to make sure that whatever they announce is big enough and fast enough to make a genuine difference in a floundering economy.”

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