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The government is also considering extending its travel ban on virus-affected countries to include all of Europe.
The economic stimulus package will subsidise the wages of 120,000 apprentices, offer one-off cash payments for welfare recipients and give up to $16,160 to small businesses, among other measures [File: Mark Graham/Bloomberg]
Australia's government said it would pump 17.6 billion Australian dollars ($11.4bn) into the economy to try to stop the coronavirus outbreak triggering a recession, as it weighed an extension of travel restrictions following a formal pandemic declaration.
The last time Australia rolled out a stimulus package was during the 2008 global financial crisis - when it managed to avoid a recession - illustrating the lengths the government will go to to limit the economic impact of the outbreak.
Despite only affecting about 130 people in Australia so far, with three confirmed deaths, economists expect the outbreak, classified as a pandemic by the World Health Organization, to cause a recession in the second quarter.
The package will subsidise the wages of 120,000 apprentices, offer one-off cash payments for welfare recipients and give up to A$25,000 ($16,160) to small businesses, Prime Minister Scott Morrison said at a news conference in Canberra on Thursday.
"This is a comprehensive, a well-thought-through, a well-targeted plan, which is designed to support the Australian economy and jobs and businesses through the difficult months ahead," Morrison said.
More than 6 million welfare recipients, notably pensioners and unemployed citizens, will get a one-off cash payment of A$750 ($485) from March 31, he added.
Speaking with the prime minister, Treasurer Josh Frydenberg said most of the package would be spent immediately, potentially boosting the economy by 1.5 percentage points in the second quarter.
Australia has not experienced a recession, defined as two consecutive quarters of economic contraction, since the early 1990s.
"The package won't super-charge the economy. Neither does it guarantee that the economy won't slip into recession. But it is a good first step," said Craig James, chief economist at the Commonwealth Bank of Australia.
News of the stimulus came minutes before US President Donald Trump announced a 30-day ban on incoming travel from continental Europe, sending Australian stocks, which were trading down about 3 percent, tumbling to close down 7.4 percent.
The effects of the stimulus package remain unclear while the pandemic widens. "Whether a recession can be avoided is still an open question as the management of the COVID-19 health crisis dictates the economic fallout," said analysts from ANZ Bank in a note.
Further to halting the disease's spread, the Australian government said it would extend by a week existing travel bans on China, Iran, South Korea and Italy, which have reported higher numbers of people with the illness, while an emergency health committee would review whether to place a travel ban on all of Europe.
Actor Tom Hanks said in a social media post that he and his wife Rita Wilson had tested positive for the coronavirus while in Australia, where he was scheduled to shoot a movie. Hanks said they would be "tested, observed and isolated" as requested by the local health authorities.
Ratings agency S&P said on Wednesday it expected Australia to fall into recession in the first half of 2020, but the government's strong fiscal position allowed for stimulus without threatening its AAA credit rating.
SOURCE: REUTERS NEWS AGENCY
https://www.aljazeera.com/ajimpact/...-boost-virus-hit-economy-200312053546013.html
The economic stimulus package will subsidise the wages of 120,000 apprentices, offer one-off cash payments for welfare recipients and give up to $16,160 to small businesses, among other measures [File: Mark Graham/Bloomberg]
Australia's government said it would pump 17.6 billion Australian dollars ($11.4bn) into the economy to try to stop the coronavirus outbreak triggering a recession, as it weighed an extension of travel restrictions following a formal pandemic declaration.
The last time Australia rolled out a stimulus package was during the 2008 global financial crisis - when it managed to avoid a recession - illustrating the lengths the government will go to to limit the economic impact of the outbreak.
Despite only affecting about 130 people in Australia so far, with three confirmed deaths, economists expect the outbreak, classified as a pandemic by the World Health Organization, to cause a recession in the second quarter.
The package will subsidise the wages of 120,000 apprentices, offer one-off cash payments for welfare recipients and give up to A$25,000 ($16,160) to small businesses, Prime Minister Scott Morrison said at a news conference in Canberra on Thursday.
"This is a comprehensive, a well-thought-through, a well-targeted plan, which is designed to support the Australian economy and jobs and businesses through the difficult months ahead," Morrison said.
More than 6 million welfare recipients, notably pensioners and unemployed citizens, will get a one-off cash payment of A$750 ($485) from March 31, he added.
Speaking with the prime minister, Treasurer Josh Frydenberg said most of the package would be spent immediately, potentially boosting the economy by 1.5 percentage points in the second quarter.
Australia has not experienced a recession, defined as two consecutive quarters of economic contraction, since the early 1990s.
"The package won't super-charge the economy. Neither does it guarantee that the economy won't slip into recession. But it is a good first step," said Craig James, chief economist at the Commonwealth Bank of Australia.
News of the stimulus came minutes before US President Donald Trump announced a 30-day ban on incoming travel from continental Europe, sending Australian stocks, which were trading down about 3 percent, tumbling to close down 7.4 percent.
The effects of the stimulus package remain unclear while the pandemic widens. "Whether a recession can be avoided is still an open question as the management of the COVID-19 health crisis dictates the economic fallout," said analysts from ANZ Bank in a note.
Further to halting the disease's spread, the Australian government said it would extend by a week existing travel bans on China, Iran, South Korea and Italy, which have reported higher numbers of people with the illness, while an emergency health committee would review whether to place a travel ban on all of Europe.
Actor Tom Hanks said in a social media post that he and his wife Rita Wilson had tested positive for the coronavirus while in Australia, where he was scheduled to shoot a movie. Hanks said they would be "tested, observed and isolated" as requested by the local health authorities.
Ratings agency S&P said on Wednesday it expected Australia to fall into recession in the first half of 2020, but the government's strong fiscal position allowed for stimulus without threatening its AAA credit rating.
SOURCE: REUTERS NEWS AGENCY
https://www.aljazeera.com/ajimpact/...-boost-virus-hit-economy-200312053546013.html
