Prime Minister Scott Morrison has shed light on the government’s proposed stimulus package as the country prepares for a hit from the broadening coronavirus crisis.
Mr Morrison told reporters on Tuesday that the coronavirus was a “health crisis with significant economic implications” rather than a global financial crisis and that the government wanted to put businesses – particularly small and medium-sized businesses – in a position to “bounce back strongly” when normal economic activity resumed.
“It will be a targeted plan,” Mr Morrison told media on Tuesday.
“It will be a measured plan. It will be a scalable plan. It will be targeted on the real diagnosis of the economic issue we’re looking to confront here. We will ensure that we do not make the same mistakes of previous stimulus measures that have been put in place.”
With the RBA cutting rates to a record low of 0.50 basis points, the federal government is now under pressure to provide further fiscal economic stimulus to lighten the load on businesses already reeling from the bushfire emergency.
But Mr Morrison stressed that the economy was still in a good position.
“There’s no problem with the banking system,” Mr Morrison said.
“There’s no problem structurally with the stability of the economy or things of that nature. This is a health crisis which has had serious disruptive impacts on the movement of people and of goods around the world. And that obviously disrupts supply chains and has a suppressing impact on demand. And what we are focusing on is jobs, cash flow and investment.”
Mr Morrison said that the government was concerned about supply chain disruption and indicated that the government’s stimulus likely won’t include large expenditures on infrastructure.
“It’s not a simple thing to do,” Mr Morrison said.
“You can’t just turn on an infrastructure project, not even necessarily one that’s even underway in terms of ramping up its level of activity. They will have issues about supply lines as well. And so what you have to focus on are the things that can move more readily.”
Mr Morrison did not provide any further clarity on what the stimulus could include, but previously indicated that a “targeted, modest and scalable” package could be provided to the tourism and education sections. Investment bank UBS said in a note on Wednesday that it expected a “moderate fiscal stimulus” inside of the next week.
Mr Morrison also told reporters that he had been in discussions with Coles and Woolworths to ensure the steady supply of goods like toilet paper, which have been the subject of extensive panic shopping.
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