Australia’s Prime Minister Scott Morrison announced an extension and additional 15 billion AUD ($10.8 billion) to the government’s JobKeeper scheme to offer relief for Australians during the coronavirus pandemic.
“This is the largest program of this nature the country has ever undertaken,” said Morrision during a news conference with Acting Chief Medical Officer Paul Kelly in Canberra.
Morrison warned the lockdown across Victoria state and even tighter measures in Melbourne to contain a Covid-19 outbreak will cut gross domestic product by 2.5% in this quarter.
“The events in Victoria are devastating,” Morrison told reporters in Canberra Thursday as he outlined Treasury’s initial estimates of the economic impact. “Devastating for the Victoria economy but also the national economy. The supply chain impact, the confidence impacts, these things are obviously impacting over states and territories.”
The prime minister estimated the unemployment rate was likely to peak closer to 10% — as forecast by the central bank Tuesday — rather than the 9.25% seen by Treasury in the economic update two weeks ago. The effective unemployment rate that includes workers reduced to zero hours, is now expected to climb back to nearly 14% from around 11% where it is currently, Morrison said.
The rest of Australia has isolated Victoria, shutting borders as the state’s Covid infections soared. Victoria, which accounts for almost a quarter of GDP, has implemented a curfew from 8 p.m. to 5 a.m. for Melbourne’s 5 million people and drastically tightened restrictions on retail, manufacturing and construction. The wider concern is that the spillover to the national economy erodes confidence and prompts firms to put off hiring and investing.
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