As we head into a post-crisis world, the government’s focus will be on practical solutions to the most significant challenges presented by the coronavirus pandemic, Treasurer Josh Frydenberg said on Tuesday, as he delivered a sombre economic update instead of the postponed federal budget.
“Reskilling and upskilling the workforce; maintaining our $100 billion, 10-year infrastructure pipeline; cutting red tape to reduce the cost burden on businesses and the economy; and tax and industrial relations reform as a means of increasing our competitiveness,” the Treasurer said.
Forecasting GDP to fall by over 10 per cent in the June quarter, Mr Frydenberg said: “At $50 billion, this is a loss equivalent to the total combined quarterly production of South Australia, Tasmania, the Northern Territory and the ACT.”
With the unemployment rate predicted to follow this trend, reaching around 10 per cent or 1.4 million unemployed in June, the Treasurer stressed that the private sector will lead the recovery.
“Unleashing the power of dynamic, innovative and open markets must be central to the recovery, with the private sector leading job creation, not government,” he said.
“We know that a strong economy is the foundation for everything else, and only with a strong economy can you provide the health, education and essential services that Australians rely on.”
Speaking of the government’s response to the crisis, Mr Frydenberg recounted the “race against time” the government engaged in to enact “the largest fiscal response in Australia’s history”.
“Over $25 billion of support has already flowed to households and businesses in recent weeks, with more than $30 billion to flow in the next month.
“This is the largest and fastest injection of economic support the country has ever seen.”
Mr Frydenberg revealed that the first of the $1,500 fortnightly wage subsidy payments have hit bank accounts, with enrolments to the program now surpassing 835,000 or more that 5.5 million workers.
“This is in addition to temporary cash-flow support to help small and medium-sized businesses keep operating, pay their bills and retain staff,” he said.
“Over 450,000 small and medium-sized businesses have now received over $8 billion under our cash-flow boost program.”
In total, there has been more than 80 regulatory changes that the federal government has made to provide greater flexibility and support to those affected by this crisis.
Regulatory relief has included the clarification of responsible lending laws to help credit flow faster to SMEs, as well as changes made to facilitate the rapid recapitalisation of ASX-listed companies.
He said: “Australians know that as a consequence of the actions we have taken, we are better placed than most, but there is still a long way to go.
“There will be more coronavirus cases and it is vital we remain vigilant.”
On the economic front, Mr Frydenberg noted: “Our measures are working, protecting lives and livelihoods.
“We can be confident about our future.”