A new daily email by free market think tank the Institute of Public Affairs, providing the latest economic data and policy measures for journalists, commentators and IPA members.
Daily IPA Comment attributable to Daniel Wild, Director of Research at the Institute of Public Affairs:
“The commonwealth government must now turn its attention to what kind of society, economy, and nation it expects to see at the end of this crisis. The Australian way of life entails individual freedom, hard work, small business creation, egalitarianism, sporting success, and enjoyment of our great natural bounties. This must be protected.”
“Governments at the state and commonwealth levels must include a substantial red tape reduction program as a part of their next economic stimulus and recovery packages. These will not cost one cent and will help keep thousands of Australians in work and businesses open.”
“The commonwealth government must begin to outline a plan to pay back the expected $1 trillion in public debt that will accumulate over the next three years. The bulk of the reduction must come via spending reductions led by a reduction to public sector wages and staff numbers, not via higher taxes.”
Research prepared by IPA Research Fellows Kurt Wallace and Cian Hussey.
- 5,749 cases and 37 deaths at 12:00pm. Despite the spike in deaths, the daily increase in cases continued to slow, down to 2.5 per cent on Sunday, down from 5.6 per cent last Thursday, 6.7 per cent last Wednesday, 7 per cent last Tuesday, and 9 per cent last Sunday.
- Charities will now only need a 15 per cent reduction in revenue to access the JobKeeper Payment, down from 30 per cent when the policy was originally announced. This applies to all charities, regardless of their turnover.
- Newspoll out today shows that net satisfaction with Scott Morrison has risen to 26 per cent, a sharp rise from the -22 per cent in January and February. This is the highest rating for any Prime Minister since Kevin Rudd at the height of the GFC in 2009.
- More than 360,000 people have registered to withdraw money from their superannuation accounts.
- The Australian Financial Review’s March economist survey shows a median expectation that the economy will contract 3.9 per cent and unemployment will increase to 9 per cent this calendar year.
- NSW Police is launching a criminal investigation into the docking of the Ruby Princess cruise ship in Sydney. As of Sunday, at least 10 Ruby Princess passengers had died of COVID-19 and more than 600 cases have been traced to the ship, making it the single largest outbreak of the virus in Australia.
- The banking sector is prepared to extend credit to businesses to keep paying wages until they receive JobKeeper payments at the beginning of May.
- Across the country, petrol sales have fallen between 30 and 50 per cent on 2019 volumes since late March, diesel sales have fallen between 10 and 30 per cent.
- Unemployment has increased to 4.4 per cent, with an additional 1.4 million unemployed people, up from a 50-year low of 3.5 per cent in February. This is the sharpest one-month increase since 1975. Job losses will likely be much higher as the figure was recorded between 8-14 March, before the heaviest layoffs occurred which have seen almost 10 million people claim unemployment benefits in the past two weeks.
- President Trump is prepared to impose tariffs on crude oil imports to protect US energy workers from the oil price crash.
- Financial regulators have freed up about $500 billion ($828 billion AUD) of capital for lenders around the world to help them absorb the impact of coronavirus, according to the Financial Times.
- Boris Johnson was admitted to hospital on Sunday but continues to run the government.
The IPA estimates 717,000 jobs have been lost due to the shutdown.
- Major cuts to pubs and clubs, cafes, social clubs, arts and recreation, and hairdressing and beauty.
- Substantial cuts to cafes and coffee shops, catering services, clothing retail, jewellers, and travel agencies.
- Moderate cuts to hotels, resorts, motels, and restaurants.
- 28,000 layoffs at Qantas and Virgin.
- Based on industry employment numbers from IBISWorld.
- This is likely to be a very conservative estimate as it doesn’t include many industries indirectly affected. This also doesn’t consider the significant amount of reduced hours across the economy.
Announced stand-downs and layoffs from large companies.
- This is a running count of announced stand-downs and layoffs and is compiled of companies that have made a public announcement including a specific number of employees let go.
Running total – 123,955
- Qantas 20,000.
- Crown 20,000 (Crown estimates it has 4,000 small businesses that depend on it).
- Myer 10,000.
- Premier Investments 9,000.
- Star Entertainment 8,100.
- Virgin 8,000.
- ALH Group 8,000.
- Mosaic Group 6,800.
- Country Road Group 5,000.
- Accent Group 4,500.
- Flight Centre 3,800.
- Pacific Brands 3,000.
- Michael Hill 2,500.
- Adairs 1,800.
- Helloworld 1,575.
- Uniqlo 1,500.
- Kathmandu 1,300.
- Sussan Group 1,300.
- H&M 1,300.
- Viva Leisure 1,002.
- Lovista 800.
- RM William 709.
- Freedom Furniture 700.
- Woodside 650.
- Opera Australia 600.
- Webjet 440.
- Kikki.k 440.
- Colette 210.
- KPMG 200.
- Hutchinson Builders 200.
- Manly Fast Ferry and Captain Cook Cruises 180.
- Santos 150
- Kresta 130.
- Harris Scarfe 59.
Stimulus measures – updated 6 April
- A $40 billion discretionary fund has been set aside under the control of the Finance Minister.
Households ($25 billion)
- $14.1 billion welfare:
- Expanded eligibility to income support payments.
- Additional $550 per fortnight.
- $1.6 billion welfare expansion to students:
- Expands the $550 per fortnight payment to students not included under the original plan.
- $8.8 billion handouts:
- Two rounds (originally one) of $750 payments to income support recipients.
- $1.2 billion early superannuation access:
- Tax-free withdrawal of up to $20,000 in superannuation.
- Temporary reduction in super drawdown rates:
- Reduce minimum drawdown rates by 50 per cent for FY19 and FY20.
- $876 million lower social security deeming rates.
Business ($38.8 billion)
- $31.9 billion cash flow boost for employers. Total payment between $20,000 and $100,000.
- Temporary relief for financially distressed businesses:
- Changes to requirements around insolvency.
- $700 million increased instant asset write-off:
- Lifting asset threshold to $150,000 (was $30,000).
- Businesses eligible with turnover of up to $500 million (previously $50 million).
- $3.2 billion accelerating depreciation deductions.
- $1.3 billion wage assistance for apprentices and trainees.
- $1 billion for affected regions.
- $110 million will be allocated to creating a new freight assistance mechanism to recommence local seafood exports to China, Japan, Hong Kong, Singapore and the United Arab Emirates.
- $715 million for airlines and airports:
- Relief from a range of government taxes and charges.
- The scheme is expected to cost $130 billion across 2019-2020 and 2020-2021.
- A payment of $1,500 a fortnight (70 per cent of the median income) before tax.
- Available for up to 6 months.
- Businesses will be eligible if they:
- Have experienced a decrease in turnover of at least 30 per cent due to the coronavirus impact. For businesses with a turnover above $1 billion, turnover must have fallen by at least 50 per cent.
- Are not subject to the Major Bank Levy.
- Available for all full-time, part-time, long-term casuals (at least 12 months) and stood-down employees on a businesses’ books on 1 March that continue to be engaged by the business.
- Also available to self-employed sole traders.
- Legal obligation for businesses to maintain employees (i.e. they’ll have to refund the money received for any employee they fire).
- Payments will be made from May 1 and will be backdated to 30 March.
- Employees making over $1,500 a fortnight will receive their regular wage, with the jobkeeper payment partially subsidising their wage.
- Employees who earn less than $1,500 a fortnight will receive the full $1,500 a fortnight.
- Employees who have been stood down will receive the full $1,500 a fortnight.
- Employees who have ceased employment, were employed on 1 March, and have subsequently been re-engaged, will receive, at minimum, the full $1,500 a fortnight.
Lending ($125 billion)
- $20 billion SME loan guarantee.
- $15 billion from the government for SME lending through the banks.
- $90 billion from RBA for SME lending through the banks.
$1.1 billion healthcare and vulnerable Australians package, including:
- $669 million for Medicare support at home (such as telehealth services).
- $150 million for domestic violence support.
- $74 million for mental health support.
- $200 million for charities, community organisations and food relief organisations.
$3 billion childcare package announced:
- Almost 1 million families will be able to access free childcare.
- 13,000 childcare providers are eligible and will receive 50 per cent of their pre-crisis (last two weeks of February) fee revenue (up to the Child Care Subsidy hourly rate cap) from the government from Monday 6 April.
- Means-tested Child Care Subsidy temporarily ceased.
- In place for six months.
$1.3 billion underwriting of Australia’s 657 private hospitals under an agreement that will open up the 35,000 private hospital beds to public patients. The states and commonwealth will split the cost of services provided 50-50, and the $1.3 billion provides an initial payment on an uncapped “viability guarantee” to offset lost revenue from cancelled elective surgeries.
The foreign ownership threshold that triggers government scrutiny of investment through the Foreign Investment Review Board will be lowered from $1.2 billion to $0.
Private health insurers will postpone planned April 1 premium increases for at least six months.
Across the country, all pubs, clubs, nightclubs, casinos, gyms, indoor sporting venues, places of worship, cinemas and entertainment venues, beauticians, tattoo parlours, and nail and tanning salons close. Cafes and restaurants to provide delivery or takeaway only. Limit on gatherings has been cut from 10 to 2 people. Weddings will still be allowed 5 people and funerals 10.
- Three-stage, $1.7 billion stimulus announced.
- $550 million payroll tax refund for 24,000 SMEs with a payroll of less than $3 million (refunds available from Friday, March 27).
- $500 million fund for hardship payments, small grants and tailored support.
- $600 million for a range of measures, including waiving liquor licence fees for 12,500 venues.
- $1,600 fines for those breaking social distancing requirements.
- An additional $1.3 billion spend on Victoria’s health system. The package is estimated to increase the number of ICU beds from 500 to 4,500.
New South Wales
- $3.3 billion stimulus package announced.
- $1 billion Working for NSW fund to create new jobs.
- $700 million extra funding for NSW Health.
- $450 million to waive payroll tax for businesses with payroll of up to $10 million for the next three months.
- $56 million to bring forward payroll tax cuts by raising the threshold limit to $1 million in 2020-21.
- $80 million to waive a range of fees and charges for small businesses.
- $250 million to employ additional cleaners of public infrastructure.
- $250 million to bring forward maintenance on public assets.
- $500 million to bring forward capital works and maintenance.
- 6 month deferral of gaming taxes for pubs, clubs, hotels and lotteries (with the condition that the money is spent on retaining staff).
- Rents for commercial tenants with fewer than 20 employees in government-owned properties will be suspended until the end of September.
- $34 million boost in funding to prevent homelessness.
- $30 million boost for the Energy Accounts Payments Assistance scheme.
- $10 million to support charities.
- $6 million additional funding for Lifeline’s operations in NSW.
- New $750 million support package aimed at supporting small businesses. It will provide $10,000 grants for up to 75,000 small businesses (NSW has around 710,000 small businesses). To be eligible, businesses have to employ up to 19 people and turnover more than $75,000 a year.
- NSW will also spend $70 million to fund housing infrastructure in Sydney’s north-west.
- 24 hour trading allowed for supermarkets and pharmacies.
- $4 billion stimulus.
- $300 million household relief package will give households $200 off their utility bills.
- $2.5 billion directed towards workers and businesses, including $500 million to assist workers who lose their job or income. Liquor licence fees are being waived, rent relief for businesses who rent premises from the state government, and sole traders and SMEs will receive a $500 rebate on their power bill for the year.
- $1.2 billion expanding fever clinics, emergency department capacity, acute care services and regional aeromedical services for remote communities.
- Includes two months worth of payroll tax refunded to SMEs and a payroll tax holiday for the April-June quarter. Large businesses can apply to access this payroll tax holiday if they are impacted by coronavirus.
- Other measures:
- $500 million in 12-month, interest-free loans.
- $27.5 million Immediate Industry Recovery Package to provide relief to affected industries, businesses and workers.
- $17 million vaccine package.
- $8 million funding relief for the arts sector.
- Allowed distribution centres and loading bays to operate 24/7 to allow supermarkets to restock shelves.
- $1 billion economic and health relief package:
- Power and water disconnections will not occur, and interest will not be charged on deferred payments until 30 September 2020.
- Interest-free payment arrangements and late payment penalties waived for transfer duty, landholder duty, vehicle licence duty or land tax.
- One-off $2,500 credit on electricity bills for 95,000 small businesses, available for those that consumer less than 50MWh per annum.
- Payroll tax will be waived for four months for businesses with a wages bill under $7.5 million a year.
- Range of licence fees will be waived for small and medium businesses.
- $607 million stimulus package.
- $402 million freeze on household fees and charges, including electricity, water, motor vehicle charges, emergency services levy and public transport fares.
- $114 million to support SMEs.
- $91 million to double the Energy Assistance Package to $600 for eligible concession card-holders.
- $1 million payroll tax threshold brought forward to 1 July, 2020.
- SMEs can apply to defer payment of 2019-20 payroll tax until 21 July 2020.
- Limit on the sale of alcohol to one carton of beer, cider, or pre-mixed spirits, or three bottles of wine, or one litre of spirits, per person per day. The limit will be reviewed after two weeks.
- Travel between the state’s regions is banned. Some exemptions for work and compassionate reasons, but $50,000 fines will apply to those who breach the rules.
- Travel to WA from the other states has now been banned. Some exemptions apply for freight and essential work, and on compassionate grounds.
- $1 billion stimulus/support package announced.
- $650 million “jobs rescue package”.
- $350 million stimulus package, all spending no tax relief:
- Major road and hospital upgrades, tourism upgrades, increased funding for Economic and Business Growth Fund.
- 24 hour trading allowed for supermarkets and pharmacies.
- $1,000 fines for those not abiding by social distancing requirements.
- Total stimulus/support package of $1 billion.
- $580 million support package includes:
- $150 million boost to health spending, a freeze on all power, water and electricity prices for homes and small businesses and the waiving of first quarter utility bills for all small businesses.
- Interest free loans and tax and charges waivers for businesses shut-down or severely impacted.
- $40 million small business grants program and extension of payroll tax relief for hospitality, tourism, seafood and other impacted companies.
- Plan to negotiate with councils to freeze rates.
- $420 million stimulus package:
- $1 million over next three months to organisations such as Salvation Army, Red Cross to support self-isolated individuals.
- One off payments of $250 for individuals and up to $1,000 for families who are required to self-isolate.
- $1 million emergency accomodation support for people who must self-isolate but cannot return to usual residence.
- $4 million for primary health and mental health sectors.
- $20 million interest free loans for small businesses in certain sectors with a turnover of less than $5 million.
- Payroll tax waived for hospitality, tourism and seafood industry businesses. Other businesses must apply for payroll tax waiver.
- $50 million to fast track maintenance on public buildings.
- Other small business grants, payroll tax rebates and funds to support training and employment.
- Ordered all visitors to the state to leave by midnight on Sunday 29 March.
Australian Capital Territory
- $137 million stimulus.
- $150 rates rebates for every household, $200 rebate for those on utilities concession.
- Vehicle registration, public transport fares and parking fees frozen.
- $2,622 credit to commercial rates bill.
- $750 rebate to small businesses through the next electricity bill.
- Businesses paying up to $10 million in wages can defer payroll tax for 12 months. “Affected” industries receive a one-off six month waiver.
- Taxi and rideshare fees waived. Food and liquor license fees waived.
- $20 million fund for simple infrastructure works on public buildings.
- $500,000 in arts grant funding brought forward.
- $7 million for non-government organisations to meet increased demand for social services.
- $65 million stimulus:
- $30 million home improvement scheme.
- $20 million business improvement grant.
- $5 million immediate work grant.
- $5 million structural adjustment package.
- All regular increases to government fees and charges, including electricity costs, put on hold.
- Payroll tax exemption for hiring Territory employees extended to 30 June 2021.
- Additional, $50 million Small Business Survival Fund.
$2 trillion (USD) Stimulus details
- Direct payments:
- $1,200 payment for singles and $2,400 for couples.
- An additional $500 per child under 17.
- Full payment for those earning up to $75,000. Phased out up to $99,000.
- Business loans:
- $500 billion in loans and loan guarantees.
- $29 billion for airlines.
- $17 billion for businesses involved with national security.
- $456 billion administered through the Federal Reserve emergency lending facilities.
- Ban on stock buybacks and restrictions on dividends and layoffs for companies receiving loans.
- An additional $600 a week for four months.
- Student loans:
- Suspension of payment without penalty through to 30 September.
- Retirement plans:
- Removal of some restrictions and penalties for early withdrawal from retirement funds for those economically impacted.
- $130 billion on hospitals and health providers.
- Food stamps:
- $25 billion on food stamps.
- State and local governments:
- $150 billion.
- $31 billion on education.
- $10.5 billion on defense.
- $75 million for public television and radio.
- $75 million for the National Endowment of the Arts.
- $75 million for the National Endowment of the Humanities.
- $25 million for the Kennedy Center (performing arts).
The Trump administration has extended its social distancing guidelines through to the end of April.
- £350 billion government-backed loans, grants and tax cuts for companies.
- £10 billion to pay workers who lose their jobs up to 80% of their wages.
- VAT (GST equivalent) payments suspended for April-June, a £30 billion tax holiday.
- Unlimited 12-month, interest free loans for businesses.
- £7 billion additional welfare support, including increase in universal credit payments.
- £1 billion support for renters.
- £9 billion bailout for nearly 4 million self- employed workers announced.
- Self-employed will be able to claim up to £2,500 a month over a three-month period.
- Open to those with trading profits of up to £50,000 a year and those who earn the majority of their income from self-employment.
- The scheme won’t become available until June, and the chancellor has warned that the self-employed will face an increase in national insurance contributions in the future.
- Customs duty and import VAT will be waived on specific medical goods coming from outside the EU. The tariffs, which can be up to 12 per cent, are being removed on ventilators, coronavirus testing kits and a range of protective clothing until 21 July 2020.
- Almost 1 million people applied for universal credit between March 16 and April 1. This is up from the average of 100,000 claims per fortnight.
- The UK’s largest lenders have cancelled their dividends for 2019, will refrain from setting aside cash for dividends this year, and have pledged not to carry out share buybacks. The coordinated announcements were made following a “formal request” from the Prudential Regulation Authority, the supervisory arm of the Bank of England, to “serve the needs of businesses and households”.