Coronavirus latest: NBA season cancelled as Asia markets slide on pandemic
Australia announces $11bn stimulus to counter coronavirus hit
Jamie Smyth reports from Sydney
Australia launched a A$17bn ($11bn) stimulus package on Thursday in a bid to prevent the spread of the coronavirus from plunging its economy into recession for the first time in almost three decades.
The measures include a cash payment of up to A$750 for almost 6.5m pensioners, people receiving welfare benefits and low-income families to encourage household spending and tax breaks for businesses.
Canberra also agreed to fast-track welfare payments for casual workers, who may have to self-isolate or cannot go to work because of the spread of virus.
The cash splash, which will be frontloaded with A$11bn spent before the end of June, forced prime minister Scott Morrison’s conservative government to admit it would not deliver on its electoral promise to deliver a budget surplus in 2019-20.
Josh Frydenberg, Australia’s treasurer, said the money would begin flowing from March 31 and is expected to add up to 1.5 per cent to gross domestic product in the second quarter.
He said it remained unclear what impact the virus would have on growth and whether a recession could be avoided, as this depends on how the coronavirus spreads over coming months.
“The package is designed to support confidence, to encourage investment, and to keep Australians in a job,” Mr Frydenberg said.
The total impact of the stimulus package over the next three years is estimated to be worth A$22bn, equivalent to 1.2 per cent of GDP.
Australia has enjoyed a record 29-year run without experiencing a recession, in part due to the phenomenal growth of China, its largest trading partner.
But the widespread shutdown of business in China following the rapid spread of coronavirus in January and February is causing a painful slowdown in Australia, which is predicted to report an economic contraction in the first quarter.
S&P and Westpac have forecast the Australian economy will move into recession by June 2020.