Katina Curtis, AAP Senior Political Writer
(Australian Associated Press)
Australia’s economy is shedding $4 billion every week businesses are closed and travel is shut down, giving leaders a very strong incentive to get things moving again as the coronavirus is wrangled under control.
Treasurers are looking at the best ways to boost economic growth, including a possible company tax cut, a focus on skills and training, and the potential for new, niche manufacturing industries.
There are a million Australians newly on unemployment benefits and another five million are receiving the JobKeeper wage subsidy through their employer.
One in three hospitality workers have lost their job during the economic fallout from the virus, new data from the Australian Bureau of Statistics shows.
The arts and entertainment sector is close behind, shedding more than a quarter of workers.
Overall, the economy lost 7.5 per cent of jobs and wages shrank by eight per cent over the month to mid-April.
Treasury has estimated the economy will take a $50 billion hit in the June quarter, equivalent to about 10 or 12 per cent of GDP.
But it’s warned things could get a lot worse if restrictions to deal with the coronavirus stay in place.
Prime Minister Scott Morrison says the $4 billion-a-week cost is a very strong incentive for leaders looking at easing restrictions.
“That certainly puts enormous pressure, as it should, on the timetable as we seek to move Australia back to … a COVID-safe economy,” he said on Tuesday.
“We now need to get a million Australians back to work. That is the curve that we need to address.”
Treasurer Josh Frydenberg said the focus should be on the sectors that enabled other areas of the economy to get moving faster.
“The quicker we lift those restrictions, the more economic activity we generate,” he told the National Press Club in Canberra.
“Education, child care, transport and logistics … even opening our cafes and restaurants will mean that farmers will have a home for their produce.”
Treasury estimated that if schools and child care had completely closed down for three months, a million adults would have had to pull out of the workforce and the economy would have taken a $34 billion hit.
The federal government has been strongly advocating for all schools to return to in-classroom teaching.
Mr Frydenberg acknowledged some sectors, such as tourism, would be much slower to return to normal.
His thoughts are turning to the best way to boost Australia’s economic growth once the health crisis is over.
The heads of Treasury and the Reserve Bank have told leaders economic approaches cannot be business as usual.
But Mr Frydenberg said the coalition intended to hold fast to its guiding values and principles.
It will look to tax cuts where possible, believes open markets are key, and wants the private sector rather than government to drive job creation.
The government didn’t have a “shopping list of reforms” and would be looking at everything suggested in recent times for boosting growth and productivity.
But he still believed the company tax rate was too high at 30 per cent for big businesses and said Australia had to be as competitive as possible.
He wouldn’t comment on whether the states have asked to look at GST, saying the nation’s Treasurers regularly discuss a whole range of issues.