AUSTRALIA – ECONOMIC POLICY

Post-pandemic world a great chance to turbocharge growth

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Original article by Patrick Commins, Ewin Hannan
The Australian – Page: 1 & 6 : 24-Apr-20

Professor Ian Harper says Australia should pursue micro-economic reforms once the coronavirus pandemic abates. He argues that the priority should be on smaller regulatory changes that will boost productivity over the long-term, rather than wholesale reform. Amongst other things, Harper has proposed an overhaul of urban planning and zoning laws to ensure consistency across jurisdictions, and greater use of road user charges to combat traffic congestion as people begin to return to work. Harper chaired the federal government’s competition review in 2015.

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Stimulus package a big mistake, says Abbott’s former economist

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Original article by Adam Creighton
The Australian – Page: 6 : 23-Apr-20

The necessity of the federal government’s $194bn coronavirus stimulus package has been questioned by Andrew Stone, the chief economist of former prime minister Tony Abbott. Stone argues that the stimulus package – and the national lockdown – should be progressively wound back, given that the virus outbreak has not been as severe in Australia as had been feared. He has also criticised economists who have signed an open letter cautioning the federal government against easing lockdown restrictions too soon.

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Tax system doesn’t support recovery

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Original article by John Kehoe, Patrick Durkin
The Australian Financial Review – Page: 6 : 23-Apr-20

Former Treasury secretary Ken Henry has backed calls by Reserve Bank of Australia governor Philip Lowe for an overhaul of the tax system when the pandemic is contained. Henry led a review of the tax system in 2010, and he contends that its findings and recommendations are still relevant. Amongst other things, Henry advocates replacing the GST, payroll taxes and some state-based taxes with a new tax on business cash flow. He has also proposed phasing out stamp duties in favour of a land tax system.

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RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY

Company tax rate back on table

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 23-Apr-20

Deregulation, tax reform and changes to the industrial relations system are expected to be the federal government’s priorities when the coronavirus pandemic abates. The Coalition is of the view that the economy will need reforms of a similar magnitude to those implemented by the Hawke-Keating Labor government three decades ago. Treasurer Josh Frydenberg notes that Australia’s company tax rate remains high by global standards, although he has ruled out any changes to the GST at present. The government has also signalled its intention to revive the Ensuring Integrity Bill.

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AUSTRALIA. DEPT OF THE TREASURY

Tax reform cure for virus fever

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Original article by Patrick Commins
The Australian – Page: 1 & 6 : 22-Apr-20

Reserve Bank of Australia governor Philip Lowe has warned that the nation’s GDP growth will fall by around six per cent in 2020 due to the coronavirus pandemic. However, he says the economy should begin to recover in September, with GDP growth of 6-7 per cent expected in 2021. Lowe also says the unemployment rate could peak at 10 per cent in coming months, and it is likely to remain above six per cent for several years. Lowe adds that total hours worked in Australia are forecast to fall by 20 per cent in the first half of 2020. Lowe has also used a speech in Sydney to argue that industrial relations and tax reform should be considered in the wake of the pandemic.

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RESERVE BANK OF AUSTRALIA

Lowe: Business needs reforms to recover

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Original article by Matthew Cranston
The Australian Financial Review – Page: 1 & 2 : 21-Apr-20

Reserve Bank of Australia governor Philip Lowe has warned that the nation is facing a "very significant economic contraction" due to the coronavirus pandemic. He is expected to use a speech on 21 April to call for further policy reform, amid growing concern that business investment will not rebound when the crisis abates. Some economists are also of the view that economic reform will be necessary, arguing that fiscal and monetary stimulus will not be sufficient to boost business investment.

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RESERVE BANK OF AUSTRALIA

BCA plan aims to accelerate recovery

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Original article by Tom McIlroy
The Australian Financial Review – Page: 4 : 20-Apr-20

The Business Council of Australia has developed a three-tier plan for restarting the domestic economy when coronavirus lockdown restrictions start to be eased. Amongst other things, the discussion paper proposes a gradual resumption of office-based work, with appropriate health and safety measures to protect workers. The BCA has also called for regulatory and industrial relations reforms to boost economic activity, while it says the focus of government assistance should shift to accelerating the economy rather than keeping it on ‘life support’.

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BUSINESS COUNCIL OF AUSTRALIA

PM flags business growth plan

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 6 : 17-Apr-20

Prime Minister Scott Morrison has told a meeting of the national cabinet that pro-growth economic policy measures will be required in the post-coronavirus environment. He has stressed that business rather than government will lead the economic recovery, so there will be a need for policies that encourage employers to invest in their business and to hire people. Morrison has also raised the prospect that some of the policies that the Coalition took to the May 2019 election might need to be shelved. Business Council of Australia CEO Jennifer Westacott has expressed support for Morrison’s pro-business focus.

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AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, BUSINESS COUNCIL OF AUSTRALIA

Jobless rise to hit 10pc: Treasury

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Original article by Phillip Coorey, James Fernyhough
The Australian Financial Review – Page: 1 & 6 : 14-Apr-20

The Treasury estimates that the coronavirus pandemic will see unemployment peak at 10 per cent in the June quarter, compared with an official jobless rate of just 5.1 per cent in February. It would be the first time Australia has recorded double-digit unemployment since April 1994. The Treasury’s analysis also concludes that unemployment would have risen to around 15 per cent without the federal government’s JobKeeper scheme. Former AMP CEO Andrew Mohl is among the business leaders who have called for lockdown measures to be progressively wound back, noting that the restrictions are costing the economy some $550m per day in lost GDP.

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AUSTRALIA. DEPT OF THE TREASURY, AMP LIMITED – ASX AMP

We may be over-reacting to an unremarkable virus

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Original article by Adam Creighton
The Australian – Page: 10 : 14-Apr-20

Australia’s low death toll from the coronavirus and the nation’s comparatively low infection rate suggests that the lockdown measures may have been an over-reaction. Dire forecasts of hospitals being swamped with patients needing ventilators have not materialised, while government debt and the unemployment rate will rise sharply due to the coronavirus response. Indeed, a Roy Morgan survey for March found that the jobless rate is likely to double. Maintaining the lockdown for six months is unsustainable, and attention must soon turn to restarting the economy.

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ROY MORGAN LIMITED