Australia faces `sobering` future economy due to coronavirus

Source: KCTV5, 12/05/2020

“Overall, the economic data has been sobering,” Treasurer Josh
Frydenberg told Parliament on the first day of a scheduled three-
day sitting this week. He said he expects gross domestic product
(GDP) will fall more than 10% in the June quarter, representing
the biggest fall on record.
Frydenberg did not say what the government’s deficit will be. The
financial year in Australia ends on June 30.
Frydenberg had a lengthy coughing spell during his speech to
Parliament, forcing him to stop several times to takes sips of
water. A test showed he did not have the coronavirus.
“Yesterday I was tested for COVID-19 out of an abundance of
caution on the advice of the Deputy Chief Medical Officer,”
Frydenberg said in a Twitter post Wednesday. “This morning I
received the result of the test which was negative.`
Other lawmakers present during Frydenberg`s speech appeared to be
observing social distancing. The most prominent Australian
lawmaker known to have had the virus is Home Affairs Minister
Peter Dutton, who has recovered.
The federal government allocated more than 230 billion Australian
dollars ($148 billion) in measures to offset the virus impact,
more than half of that aimed at helping eligible employers keep
their businesses afloat.
“Given the level of uncertainty, our economic measures provide
more than financial relief,” Fydenberg said. “They provide a
psychological boost as well.”
Earlier, Frydenberg had forecast unemployment would double to 10%.
Australia, with an economy about the size of Spain`s, is thought
to have entered its first recession in three decades this year.
But Frydenberg said the additional support for employers and
employees during the pandemic being sought by the opposition was
unlikely to happen.
“Australians know there is no money tree,” Frydenberg said. “What
we borrow today, we must repay in the future. Temporary and
targeted, the new spending measures were not designed to go
forever but to build a bridge to the recovery phase.”
Frydenberg said the underlying cash deficit at the end of March
was A$22.4 billion ($14.4 billion), almost A$10 billion ($6.5.
billion) higher than the government forecast in December’s midyear
budget update.
When Frydenberg released the 2019-20 budget in April 2019, he said
Australia was “back in the black,” with a A$7.1 billion ($4.6
billion) surplus forecast this financial year. But the government
revised its surplus forecast to A$5 billion ($3.2 billion) in
December -- before devastating wildfires and the coronavirus hit
the Australian economy.
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