Prime Minister Scott Morrison will forgo bringing the federal budget back to surplus in order to fund a multibillion-dollar stimulus package to counter the effects of the coronavirus, the details of which are expected to be revealed in coming days.
Wage subsidies, cash injections and tax breaks are all reportedly being considered by the federal government, however, there are differing reports this morning about the size of the stimulus package. The Australian reports the total package could be worth more than $10 billion, while the Sydney Morning Herald has it closer to $3 billion.
While the likes of Myer chief executive John King have called for the government to give consumers cash payments to propel more spending through the economy, mimicking the Rudd government’s stimulus package in response to the global financial crisis in 2009, Morrison has repeatedly referred to his government’s response as being “targeted, measured and scalable”.
According to reports, we will know the make-up of this response by Wednesday. The Guardian reports businesses are expected to receive some assistance through instant asset write-offs and tax breaks for investment, while the federal opposition is calling for financial support for casual workers who may need to take time off work if they become ill.
Many business owners will no doubt welcome financial support from the federal government, however, members of SmartCompany‘s Brains Trust last week pointed out that the government’s response needs to be about much more than money.
“We all need to have a reality check,” said Terri Vinson, founder of Synergie Skin.
“Coronavirus will severely affect business because people will be staying home. They are not going out, they are not purchasing, they’ve lost confidence.
“If I was the prime minister, I would send a taskforce out to every business to talk to the team members and reduce the panic. I would work on education, rather than plugging money.
“It starts with education, and we need to be out there educating people that this is not a deadly disease, because it isn’t.”
The Victorian Chamber of Commerce and Industry has waived membership fees for one year, offering business owners free access to business services. New members will have their annual fees waived, up to the value of $700, while existing members will receive a business credit of $500.
The measure is intended to help Victorian businesses recover and remain resilient in the wake of the bushfire crisis, and while facing a decline caused by the coronavirus outbreak.
“The initiative is open to every Victorian business because we believe that Victorian business needs our help and we want to make sure every business, no matter its size, can access the expert services it needs to see a way back to profit,” it said in a statement.
Economists are predicting further tough trading conditions for the country’s retailers, following the release of the latest retail spending figures last week.
While the effects of the coronavirus were not yet present in the figures from January, Capital Economics’ senior economist Marcel Thieliant told the ABC discretionary spending will take a hit.
“It’s possible that panic buying of essential household items boosted food, pharmaceutical and toiletry sales, but we estimate that they account for just 14 per cent of consumption,” Thieliant said.
“We are now working on the assumption that the number of coronavirus cases in Australia will soon be in the thousands.
The weak retail conditions have claimed a growing list of businesses, with the likes of Ishka, Colette by Colette Hayman, Jeanswest, Harris Scarfe, Bardot and Curious Planet all collapsing in recent months.
According to Bloomberg, it’s possible the US may already be in recession, despite good news about a declining unemployment rate.
Happily, that’s not to say the economy is tanking. Just that it’s not expanding at the same rate it has been for the past 12 months.
Apparently, the US economy was vulnerable to a recession before the coronavirus outbreak. In January, the chance of recession over the next six months was at 70%. Now, since the stock market has crashed, people are feeling poorer and more pessimistic, meaning that has now gone up to about 75%. If the stock market declines much more, it could go up to 80%.
Ultimately, the run of economic growth in the US was a little more fragile than many thought, making it more susceptible to the virus. Whether the same can be said for the Aussie economy remains to be seen.
In the latest update in the toilet paper panic-buying fiasco, Coles has officially joined Woolworths in limiting the amount of TP customers can buy in one go. While Woolworths has limited sales to two packs per person, Coles will only allow one pack per customer, per shop, SBS reports.
In a notice distributed in stores, nationally, the supermarket giant blamed the shortages on “sudden and unprecedented demand”, rather than a lack of stock, seemingly taking a stab at those buying more than they need.
“The problem is that some people are buying a lot more toilet paper than they normally do and more than they need to,” the notice says.
“At Coles, we have a responsibility to ensure every Australian can access their fair share of the things they need every day. And right now, not every Australian can; including the elderly and most vulnerable.”
And finally, in related toilet news, founder of electronics retailer Kogan tweeted to say the site’s top-selling product last week was a smart toilet seat. This throne offers a cleansing spritz for your behind, as well as a soothing heated seat.
This was our top selling product this week. No shit. pic.twitter.com/PEg5C6fcCV
— Ruslan Kogan (@ruslankogan) March 6, 2020
News Editor
Prior to joining SmartCompany, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry. Eloise has degrees in media and communications, marketing and business management, and political science. You can follow her on Twitter at @ellykeating.
