Prime Minister Scott Morrison has said that the anticipated multi-billion dollar stimulus package designed to save the economy from the fall-out of coronavirus will be “temporary”, “proportionate” and “protect the structural integrity of the budget”.
The government is still finalising the details of the package, speculated to be at $10 billion, but Newstart recipients, small business owners and pensioners are expected to benefit.
Morrison said the rescue package will be guided by seven core principles and spent much of the speech outlining how it would avoid the “pear-shaped” mistakes from the global financial crisis, referring to then-Prime Minister Kevin Rudd’s stimulus measures.
“This is a dynamic situation we’re in,” he said, speaking at the AFR Business summit on Tuesday morning.
“We cannot bake into the bottom line this response for years to come, holding the budget underwater,” he said.
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“By following these principles we believe we will protect the structural integrity of the budget; we will maximise the impact of the measures to protect the livelihoods of Australians and our economy during this difficult period.
“And in doing so will prevent the need for governments to spend the better part of a decade, restoring the fiscal position, and even longer paying back to the day when the economy bounces back.
“Our plan is that the budget bounces back as well. The stronger the recovery, the stronger the economy, the stronger the budget.”
“We must not waste taxpayers’ resources.”
‘Patriotism’: Big business called to pull their weight
The prime minister said big businesses had a big role to play in the recovery process and encouraged leaders to keep workers in jobs, invest, and pay sick leave where needed even if employees weren’t entitled to it.
“This is one of those national interest moments,” he said.
“We now have one goal, together this year to protect the health, the wellbeing and livelihoods of Australians through this global crisis, and to ensure that when the recovery comes, and it will, we are well-positioned to bounce back strongly on the other side.”
Morrison urged leaders support full-time, part time and casual staff to keen them employed “wherever possible”, as well as providing paid leave where needed during the course of the virus.
“Hold onto your people because you will need them [upon] bounceback on the other side.”
He also encouraged companies to pay staff and suppliers not just on time, but ahead of time.
“How you support your customers, your suppliers, your employees during the next six months, and potentially beyond next year, will say more about your company, your corporate values, and the integrity of your brand than anything you’ve likely done as an organisation,” he said.
On top of perseverance, common sense, commitment and calm, “patriotism” was also needed during this time, Morrison said.
“You want to know what you can do? Keep Australians in jobs, keep businesses in business, and support Australia through this crisis.”
“That is what sticking together looks like.”
Qantas CEO Alan Joyce and Air New Zealand CEO Greg Foran have taken measures to mitigate the impact of coronavirus to the businesses, including denying themselves part of their salary.
Joyce this morning announced that he would not pay himself a salary until 1 July, and Foran said yesterday that he would shave $250,000 or 15 per cent off his $1.65 million salary.
Cash splash desperately requested
Teasing the package last week, Frydenberg said the “package of measures will be responsible and will be scalable”, but stopped short of promising a Kevin Rudd-style “cash splash” stimulus package.
However, Australian Council of Trade Unions secretary Sally McManus said the 3.3 million Australians without access to paid leave must not be forgotten by any potential stimulus package.
“Without a proper, detailed economic support package for the 3.3 million people who have no access to paid leave there is not only an economic impact on those workers but also a significant health risk to the broader community,” McManus said in a statement last week.
“Workers without access to paid leave will be placed in the impossible position of choosing whether to attend work while suffering symptoms, possibly infecting others, or self-isolating without any means to pay their bills.”
The Australian Council of Social Services (ACOSS) also called on the government to increase Newstart, arguing that would also be an effective form of stimulus.
Noting the relatively soft GDP growth of 0.5 per cent, ACOSS CEO Dr Cassandra Goldie said the government needs to do more than cut taxes to boost the economy.
“A Newstart increase of $95 a week would deliver a $4 billion boost to the economy and generate thousands of jobs,” she said.
“Through a Newstart increase the stimulus would flow directly where it is needed most, including those regional communities grappling with high unemployment in the wake of the bushfires and drought. It would mean people in greatest need would immediately spend on the basics in these local economies.”
Frydenberg on Monday responded by saying he was “very conscious” of Australian casual and full time workers.
“Our focus is on getting a cooperative workplace,” he said.
“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.”
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