Australian Stimulus to Protect Against Virus May Be $3.3 Billion

Australia’s fiscal stimulus package to protect the economy against the impact of thecoronavirus may be about A$5 billion ($3.3 billion), the Sunday Telegraph reported.

The government may sign off on the package at a Cabinet meeting on Tuesday, according to the newspaper, which didn’t identify its sources. It will probably include wage subsidies and payments for small businesses, according to the report.

Governments around the world have already pledged more than $54 billion inbudget support to counter the virus’s impact. Australian Prime Minister Scott Morrison has yet to put a figure on his plan, which he has said will be “targeted, measured and scalable,” with an emphasis on protecting business cash flow and jobs.

The Australian Financial Reviewreported the package may feature tax breaks to spur emergency investment by big businesses while the Australiannewspaper said stimulus could include cash payments to households.

For Australia, the economic impact of the coronavirus is coming hot on the heels of a summer of devastating wildfires that were already expected to crimp economic growth. Initial estimates of the virus’s impact from the nation’s Treasury and central bank suggest the economy is likely to suffer a quarterlycontraction for the first time in nine years.

Josh Williamson, a senior economist for Australia at Citigroup Inc., projects it will be A$3 billion to A$5 billion “at most,” equivalent to about 0.1% of gross domestic product.

The Sunday Telegraph also reported that the government may encourage pensioners to spend more by lowering the amount they are allowed to earn from financial assets before receiving government assistance.

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