Australia extends stimulus spending as recession looms

SYDNEY (AFP) – Australia will extend record stimulus spending into next year, the government announced yesterday, outlining multibillion-dollar measures to shield the labour market from the ravages of the rolling coronavirus crisis.

Prime Minister Scott Morrison said that supplements to the unemployed and businesses struggling to retain staff would continue until at least the end of the year, and likely beyond.

With Australia poised to fall into its first recession in almost 30 years and struggling to tame now double-digit unemployment, the government will increase stimulus spending on two income support programmes to around AUD86 billion (USD60 billion).

The Australian government has already doled out around AUD30 billion to almost one million companies which have seen their turnover slashed.

The money has allowed around 3.5 million staff to be retained.

Morrison, who dubbed it the “COVID-19 recession”, said the stimulus programme “has saved businesses and it has saved livelihoods”, as he announced measures that would trash his much-vaunted election promise to deliver a budget surplus this year.

In a move to limit the damage to public coffers, he said aid would be slightly less generous and recipients would face tougher requirements to gain access.

Still, Treasurer Josh Frydenberg described the support package as “the largest single economic measure” any Australian government had ever launched, and said the hit to the economy was the biggest in at least 100 years.