Australia extends stimulus spending as ‘COVID-19 recession’ looms

The government has described the coronavirus’s impact on the economy as the largest in at least 100 years

SYDNEY: Australia will extend record stimulus spending into next year, the government announced on Tuesday (Jul 21), outlining multi-billion-dollar measures to shield the labour market from the ravages of the rolling coronavirus crisis.

Prime Minister Scott Morrison said that supplements both to the unemployed and businesses struggling to retain staff would continue until at least the end of the year and likely beyond.

With Australia poised to enter its first recession in almost 30 years and struggling to tame double-digit unemployment, the government will increase stimulus spending on two income support programmes to around A$86 billion (US$60 billion).

The government has already doled out around US$30 billion to almost one million companies who have seen their turnover slashed.

The money has allowed around 3.5 million staff to be retained, according to government estimates.

Morrison, who dubbed it the “COVID-19 recession” said the stimulus programme “has saved businesses and it has saved livelihoods”, as he announced measures that will trash his much-vaunted election promise to deliver a budget surplus this year.

The announcement came after roughly five million Australians in the country’s second-largest city Melbourne reentered lockdown in a bid to stop a new wave of the virus.

Between February and May, two million Australians had already lost their jobs or saw hours significantly cut and the Melbourne outbreak may compound that crisis.

Treasurer Josh Frydenberg described the support package as “the largest single economic measure” any Australian government had ever launched and said the hit to the economy was the largest in at least 100 years.

Z24 News

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