GOVERNMENT SPENDING POLICY – AUSTRALIA

Lowe urges paying subsidies for longer

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Original article by Patrick Commins
The Australian Financial Review – Page: 4 : 29-May-20

Treasurer Josh Frydenberg has reiterated that the JobKeeper wage subsidy scheme and the doubling of the JobSeeker allowance are temporary and targeted measures. However, Reserve Bank of Australia governor Philip Lowe has told a Senate committee hearing that there may be a case for extending some of the coronavirus stimulus measures; he has warned that withdrawing the fiscal stimulus too soon could hinder the economy’s recovery from the pandemic. Lowe also said that recent economic data suggests that the downturn may not be as severe as had been forecast.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA

Cut tax to spark mining boom

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Original article by Geoff Chambers
The Australian – Page: 1 & 5 : 25-May-20

The Minerals Council of Australia has urged the federal government to reduce the company tax rate as part of its post-coronavirus economic strategy. MCA CEO Tania Constable says the nation’s corporate tax rate is not internationally competitive, and measures such as tax reform and speeding up project approvals could prompt a new wave of resources projects worth around $100bn. Master Builders Australia has in turn called for a $13.2bn stimulus package for the construction industry. Prime Minister Scott Morrison will deliver an economic recovery speech on 26 May.

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MINERALS COUNCIL OF AUSTRALIA, MASTER BUILDERS AUSTRALIA INCORPORATED, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Bushfire recovery bill could top $2 billion: PM

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Original article by Tom McIlroy
The Australian Financial Review – Page: 10 : 12-May-20

Prime Minister Scott Morrison says that federal government spending on helping communities to recover from the impact of the summer bushfires could end up exceeding $2 billion. He has also announced another $650 million in bushfire assistance, with Morrison and Emergency Management Minister David Littleproud saying that the regions that were hit the hardest would be prioritised under the latest funding. Upwards of 16,700 applications have been approved for special small business support grants of $10,000, as well as 1,300 applications for small business grants of $50,000.

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AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

‘Australians know there is no money tree’: Treasurer

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Original article by Phillip Coorey
The Australian Financial Review – Page: 4 : 12-May-20

Treasurer Josh Frydenberg will use his economic statement on 12 May to stress that there must be a limit to the federal government’s stimulus and assistance schemes, and they must eventually be wound back. Treasury has estimated that the government’s three-stage strategy to re-open the economy by July will boost GDP by $9.4bn a month and generate 850,000 jobs. However, Frydenberg will emphasise that this is dependent on Australians continuing to observe social distancing and hygiene measures.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY

Fiscal stimulus is almost the world’s biggest

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Original article by Matthew Cranston
The Australian Financial Review – Page: 7 : 7-May-20

Analysis by BIS Oxford Economics shows that 46 advanced and emerging countries have spent a combined US8trn ($13trn) on direct stimulus measures in response to the coronavirus pandemic. Qatar tops the list, with its stimulus measures equating to 13 per cent of GDP; it is followed by Australia and Thailand, with stimulus worth 10.6 per cent and 8.9 per cent of GDP respectively. Gabriel Sterne of BIS Oxford Economics says Australia’s stimulus package was much bigger than the firm had expected, and he notes that the nation was in a strong fiscal position at the onset of the pandemic.

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BIS OXFORD ECONOMICS PTY LTD

Business cashflow assistance tops $6bn

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Original article by Geoff Chambers, Patrick Commins
The Australian – Page: 4 : 1-May-20

Prime Minister Scott Morrison says the federal government’s tax-free cashflow payments have assisted employers to remain in business during the coronavirus pandemic. New figures show that some 343,211 small businesses and non-profit organisations had collectively received $6.09bn worth of cashflow payments by 28 April. Eligible businesses are entitled to receive payments of between $20,000 and $100,000; the average amount received to date is $17,700 per business. The government estimates that about 720,000 businesses will be eligible for the payments.

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AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

It’s too little, too late: media lament aid deal

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Original article by Lilly Vitorovich, Leo Shanahan
The Australian – Page: 13 & 16 : 16-Apr-20

The federal government has announced a $91m financial relief package for the media sector, which has been hard hit by the coronavirus pandemic. Amongst other things, the government will suspend content quotas for local drama and children’s programs for the rest of the year, while TV and radio networks will collectively receive $41m in tax rebates for spectrum fees. Regional media companies will also receive financial support totalling $50m. However, industry executives had hoped for a further relaxation of cross-media ownership laws and action to force digital companies to pay for content.

CORPORATES
AUSTRALIA. DEPT OF INFRASTRUCTURE, TRANSPORT, REGIONAL DEVELOPMENT AND COMMUNICATIONS, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, SEVEN WEST MEDIA LIMITED – ASX SWM, NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS, TEN NETWORK HOLDINGS LIMITED, FOXTEL MANAGEMENT PTY LTD, AUSTRALIAN COMMUNITY MEDIA, ELLIOTT NEWSPAPER GROUP PTY LTD, PRIME MEDIA GROUP LIMITED – ASX PRT, HT&E LIMITED – ASX HT1

Free childcare in $3bn family relief package

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Original article by Geoff Chambers, Rosie Lewis
The Australian – Page: 1 & 2 : 3-Apr-20

Nearly one million families will be eligible to receive free childcare under a coronavirus package announced by the federal government. The package is expected to cost over $3 billion and run for six months, with children of essential workers, vulnerable children and parents with existing childcare placements to be given priority under the scheme. Liz Christie, the director of a Goodstart long daycare centre in Brisbane’s CBD, says the government’s announcement is a huge relief. She says the centre’s numbers have fallen from more than 200 to around 60, and that many of the parents are essential workers.

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GOODSTART EARLY LEARNING LIMITED

$1.1bn boost for GPs, Medicare

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Original article by Geoff Chambers, Simon Benson
The Australian – Page: 6 : 30-Mar-20

The federal government has announced a $1.1 billion package aimed at dealing with the secondary impact of the health and economic crisis. The package comprises $669 million to be spent on Medicare support at home, $200 million for vulnerable Australians, $150 million for domestic violence support and $74 million for mental health support. Prime Minister Scott Morrison said the package aims to help the many Australians who are currently enduring hardship.

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AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Jobless rate could hit 13.8pc despite priming of the pump

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Original article by Matthew Cranston
The Australian Financial Review – Page: 8 : 23-Mar-20

The federal government and the Reserve Bank have now announced a combined $189bn worth of coronavirus stimulus measures. This includes cash payments for small businesses and non-profit organisations. However, many companies that operate in sectors that employ a lot of people will not be eligible for financial relief. The construction, retail, hospitality, recreation and education are major employers; it is estimated that the unemployment rate would rise from 5.1 per cent to 13.8 per cent if they shed just 25 per cent of their workforce, or about 1.2 million people.

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RESERVE BANK OF AUSTRALIA