The proposal to enact a $10 billion coronavirus stimulus package is being put in front of the cabinet Expenditure Review Committee today, and if all goes according to plan, it should see the light of day by Friday.
Asked by Sky News whether this was a reasonable timeline, Mr Frydenberg said on Monday: “Oh look, obviously that work is still being undertaken, and we’ll be working with our colleagues to finalise the package, but it will be announced sooner than later.”
The Treasurer confirmed that the government’s “substantial fiscal response” is about keeping “businesses in business and Australians in jobs”.
“It’s about focusing on investment, jobs and supporting the cash flow of businesses, but obviously, we’ll also have the budget in a matter of weeks after that announcement, so there will be other opportunities too to continue to provide the support to the economy where it needs it.”
Mr Frydenberg said that the government’s response will be scalable due to its inability to predict the end date of the coronavirus spread.
“It continues to evolve, obviously more people are getting it here in Australia as well as internationally, and a vaccine is still being worked on. But what the Australian people can be reassured of is that their government is doing everything to protect them as well as to ensure that the economy remains strong.”
Mr Frydenberg suggested that the economic containment of the coronavirus will be part of the upcoming budget.
“Well, obviously in every budget there’s a whole range of measures, both short and long term, designed to strengthen the economy, and this budget will be no different to that.”
He also hinted that the government will be undertaking structural reform, possibly in industrial relations, or implement changes to the tax system or deregulation.
“We are always looking for opportunities to strengthen the economy.”
Questioned also about the impact the coronavirus is predicted to have on the economy, the Treasurer said that while it’s too early to tell, a window into its significance is the state of China’s manufacturing.
“No one is understating the global or the domestic economic impact from the spread of the coronavirus, and if there’s one window into how significant it is, it’s looking at the index that goes to manufacturing activity in China which now, as of February, saw that index fall to a rate lower than at the height of the GFC.”
Greater impact than GFC, says PM
Prime Minister Scott Morrison affirmed the Treasurer’s sentiments on Tuesday during a keynote speech at the Australian Financial Review Business Summit.
He argued that the COVID-19 could have a potentially greater impact on the economy than the global financial crisis (GFC).
Describing the crisis as a “national interest moment”, and urging “patriotism”, Mr Morrison outlined seven principles the government’s stimulus package is based on.
These, among others, include timely and scalable measures, targeted to specific issues and delivered where they will be most effective. The response is also said to be aligned with monetary policy and other governments’ responses, and will come with an exit strategy.
“By following these principles, we will protect the structural integrity of the budget and maximise the impact of our measures to protect the livelihoods of Australians and our economy. When the economy bounces back, our budget will also bounce back,” Mr Morrison said.