Australia’s government will inject A$66.4 billion ($38.50 billion) into the economy as part of a second stimulus package to shelter the country from the financial impact of the coronavirus, Prime Minister Scott Morrison said on Sunday, Trend reports citing Reuters.
The new stimulus, which dwarfs the initial A$17.6 billion ($10.20 billion) in measures announced last week, coincides with a pledge by the government to enforce social distancing rules after many people in Australia appeared to disregard health warnings and flocked to pubs and beaches amid a warm autumn spell.
Australia has recorded seven deaths linked to COVID-19, and registered 1,098 confirmed cases of the virus.
Morrison said on Sunday that the government would help underwrite loans to small and medium-sized businesses and boost unemployment benefits as companies are forced to lay off staff.
People in financial stress will also be able access up to A$10,000 tax-free of their pension funds for this and next year, while some not-for-profits and small businesses will have access to cash grants to keep staff employed.
“We will be focusing on those in the front line, those who will be feeling the first blows of the economic impact of the coronavirus,” Morrison said in Canberra on Sunday.
“There will be more packages and more support.”
Australia has now announced financial measures equaling about 10% of the country’s annual gross domestic product, the government said.
While mineral-rich Australia has enjoyed a near 30-year stellar economic run and passed through the global financial crisis without falling into recession, economists are now forecasting a sharp pull-back in spending.
“It is impossible to stop a recession because people are staying at home and are not spending, but this minimizes the collateral damage where lots of companies go bust and the recession ends up being a lot deeper” AMP Chief Economist Shane Oliver told Reuters.
One of Australia’s largest employers, Qantas Airways, last week said it would put 20,000 employees on leave as the virus has devastated the airline industry with scores of countries closing their borders.
Morrison said on Sunday states and territories would start considering “draconian” measures to enforce social distancing in a policy that will be discussed by the conservative government later on Sunday.
Local authorities closed most of Sydney’s main beaches, including Bondi Beach, on Sunday to disperse crowds.
“Too many Australians are not taking these issues seriously enough,” Morrison said.
“The measures that we will be considering tonight means that state premiers and chief ministers may have to take far more draconian measures to enforce social distancing particularly in areas of outbreaks than might otherwise be the case,” Morrison said.
While Australia and neighboring New Zealand have implemented widespread measures to limit the spread of the virus, most schools remain open and the policies are generally less stringent than those imposed in parts of Europe and North America which have suffered higher rates of infection and are in lock-down.