Prime Minister Scott Morrison and Treasurer Josh Frydenberg (Image: AAP/Lukas Coch)

While the number may seem like a hefty sum, Australia’s stimulus package of $17.6 billion only represents 0.9% of our annual GDP. This is a paltry percentage compared to other nations’ response to the impending economic crisis, many of which have been unveiled this week.

Local measures

Scott Morrison today unveiled a new range of local measures to help combat the spread of coronavirus in Australia.

Morrison announced:

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  • A complete ban on international travel, the first of its kind in Australian history.
  • The activation of the Biosecurity Act, which allows the federal government to isolate and guard individuals, force them to undergo treatment and provide body samples for diagnosis.
  • A ban on non-essential gatherings of more than 100 people indoors or 500 people outdoors. “Essential” gatherings are omitted, including public places of transit, public transport, airports, emergency services, medical and health, correctional, disability and accommodation facilities, correctional facilities, mining sites, courts and tribunals, and certain shopping and retail centres. 
  • Restrictions on travel to remote regions of Australia, particularly including remote indigenous populations.
  • Cancellation of ANZAC day events, replaced with a televised national event.
  • Restrictions for visitors at at aged care facilities.
  • News that Schools will remain open, with similar practices in Singapore and China pointed to as success stories.
  • The securing of more testing kit supplies, with 80,000 tests completed. 
  • A confirmation of 454 cases of coronavirus in Australia, most of which have come from people who have travelled abroad or people in direct contact with those who have travelled. 

Morrison stressed that a lockdown is not a solution. “There is no two-week answer to what we’re confronting, there is no short-term quick fix,” he said, stressing solutions will remain in place for six months.

He also chastised Australians for hoarding supplies, saying, “Stop hoarding. I can’t be more blunt about it. Stop it. It’s one of the most disappointing things I’ve seen in Australian’s behaviour since this crisis.” 

Morrison also stressed the need to listen to official advice and be wary of fake news. It comes the day after Alan Jones said the response to the virus had been “exaggerated”, with Australians reverting to “hysteria and alarmism”.

States step up

Along with the federal stimulus package, state governments have announced their own.

The Western Australian government has announced an economic stimulus package worth $607 million, most of which is being directed to households, covering fees and charges on electricity, water and car license and registration.

NSW announced a $2.3 billion package to give a boost to NSW health and to waive payroll tax. Queensland announced a $27 million package for tourism and fishing businesses; South Australia unveiled a $350 million construction-focused package; and Tasmania announced a $420 million package to support those forced to self-isolate.

Victoria, the ACT and NT have yet to unveil anything specific.

Americas

This morning US President Donald Trump announced the White House is seeking a stimulus package worth anywhere from US$850 billion to US$1 trillion (AU$1.4 trillion to AU$1.6 trillion) for direct payments or tax cuts, small business assistance and in airline and industry relief. 

Millionaires are unlikely to be among those who receive relief in the form of direct payments. The pack has to be negotiated with US Congress, with Trump telling reporters, “We’re going big. We want to go big, go solid.”

Venezuela has asked the International Monetary Fund for $8.3 billion ($5 billion USD) to combat the outbreak, with the country ill-prepared for a health crisis. 

Europe

The European Central Bank has not cut interest rates. While they have put in place measures to support commercial bank lending, the bank chief Christine Lagarde has come under fire for her soft stance. The head of the European Commission promised a €37 billion (AU$67.8 billion) fund to cope with the “shock”. 

The UK has promised to do “whatever it takes” with the country’s £330 billion (AU$667.3 billion) package in loans and spending, guarantees equivalent to 15% of UK’s GDP. Householders will get a three-month mortgage policy. 

Italy — the second-worst hit country after China — announced €25 billion (AU$45.9 billion) with the entire country in lockdown and the economy at a standstill. 

It all pales to Spain’s package, which represents a whopping one-fifth of the country’s GDP — €200 billion (AU$367.8 billion). France announced €45 billion (AU$82.7 billion) with reduced social security contributions, unemployment benefits and a solidarity fund for the self-employed and shopkeepers, while Greece released €2 billion (AU$3.6 billion) to cover wage bills, with business tax and social insurance contributions halted.

Russia, which is set to be hard hit by falling oil prices, announced an equivelent of US$4 billion (AU$6.6 billion) in tax breaks for airlines and tourism companies, along with loans for businesses. 

Middle East

The UAE regulator will roll out a US$27 billion economic plan to support banks and businesses, while SAR$50 billion have been announced in Saudi Arabia, focusing on small and medium businesses to preserve jobs.

Qatar announced US$20.5 billion, while Iran, the third-worst hit country after China and Italy, has announced a financial assistance program for families without fixed incomes.

Asia-Pacific 

China was quick to contain the virus but has been slow to offset the economic downturn, with no stimulus policies announced (though the central bank has been ordered to pump additional money into the banking system). 

Japan vowed a “bold” step to beat the virus, unveiling a ¥20 trillion package which will include cash payouts to households and subsidies to tourism companies. 

Across the ditch, New Zealand unveiled a NZ$12 billion package, representing 4% of the country’s GDP. 

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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