JAKARTA - The Australian Government on Thursday 12 March will disburse a stimulus of 17.6 billion Australian dollars (11.4 billion US dollars) for the country's economic sector. This was done to prevent the spread of the corona virus outbreak and to push the kangaroo country out of the first crisis that has hit nearly 30 years.
As reported by Reuters, this stimulus is the first time issued by the Australian government since the 2008 global financial crisis, which helped Australia prevent a recession at that time.
This stimulus is intended by the Australian government to reduce the economic impact of the impact of the COVID-19 outbreak. Although currently, only about 120 people have tested positive for COVID-19 in Australia, economists see the corona epidemic could lead to a recession in the second quarter.
The Morrison Government has announced a $ 17.6b economic stimulus plan in response to the challenges posed by the #coronavirus. We are focused on keeping Australians in jobs, keeping businesses in business & supporting the Australian economy. Moređhttps: //t.co/IKz4qCjGUe pic.twitter.com/EHIG5uj1YN
- Josh Frydenberg (@JoshFrydenberg) March 12, 2020
Prime Minister Scott Morrison said at a press conference in Canberra the package would subsidize the wages of 120,000 interns, offer one-time cash payments for welfare recipients and provide payments of up to 25,000 Australian dollars (16,160 US dollars) for small businesses.
"This is a comprehensive, well thought out and targeted plan, designed to support the Australian economy and jobs and businesses in the difficult months ahead," Morrison said.
Morrison said more than 6 million welfare recipients, mainly pensioners and unemployed citizens, would also receive a one-off cash payment of 750 Australian dollars starting March 31.
Speaking with the Prime Minister, Australian Finance Minister Josh Frydenberg said a large part of the package would be exhausted soon, offering up to 1.5 percentage points of the economy in the second quarter.
"This package will not quickly burden the economy. Nor does it guarantee that the economy won't fall into recession. But this is a good first step, "said Craig James, chief economist, Commonwealth Bank of Australia.
Ratings agency S&P said on Wednesday that it expects Australia to fall into recession in the first half of 2020, but the government's strong fiscal position allows stimulus without threatening its 'AAA' credit rating.
Even with the relatively small number of cases, local health officials are trying to anticipate the spread of the virus, prompting Morrison on Wednesday to pledge $ 2.4 billion in stimulus to support the health system during the outbreak.
The emergency spending package, which requires parliamentary approval in part, is likely to end Morrison's hopes of delivering Australia's first budget surplus.
However, the package did not dampen market reaction, with the ASX 200 down 3 percent after it was announced and down more than 5 percent after the United States announced a travel ban to Europe.
The package was announced after the World Health Organization (WHO) described the COVID-19 outbreak as a pandemic for the first time on Wednesday.
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