• The suicide rate in Australia could increase by 50 per cent over the next five years due to economic social impacts of Covid-19, University of Sydney research finds. (Australian)
• PM in Facebook interview last night says of Covid-19: ’It won’t be eradicated. There will still be outbreaks.’
  • This is a shift from April, when the PM had said that elimination ‘could happen.’
• Treasurer Frydenberg says JobKeeper will be reviewed after three months as ‘some industries will recover quicker than others (Sky)
• Chairman of National Covid-19 Commission says that universities and government could consider charter flights for international student and use two week quarantine periods. (AFR)
• The Australian Industry Group has called on govt to use emergency powers to prevent new class actions being filed during the Covid-19 crisis. (Australian)
  • The Parliamentary Joint Committee on corporations and financial services will investigate global litigation funding firms activities in Australia.
• Dave Sharma MP says that any ‘Trans-Tasman bubble’ should be extended to Pacific Islands to form a ‘Trans Pacific Bubble’. (Australian)
• NSW Business chief Stephen Cartwright is urging the federal govt to give employers the right to require employees to download COVIDSafe app. (Australian)
• Leaked memo from ALP leader Albanese to caucus suggests wariness of big-spending platform going into next election. (SMH)
  • Says ALP ‘must acknowledge constrained fiscal situation that will likely confront an incoming Labor government.’ 
  • Says ALP is setting up four working groups, each led by two shadow cabinet ministers to analyse post-Covid responses
• ALP shadow industry Minister O’Connor urges govt to consider equity injections into crucial manufacturing businesses to get through crisis. (Australian)
• NSW government to amend legislation next week to give local councils more power to increase rates. (SMH)
• There are ‘widespread suspicions in the intelligence community’ that a staff member of the US Embassy in Canberra has been leaking material to Daily Telegraph’s Sharri Markson to push a narrative hyping up the Wuhan lab story. (SMH)

Senate Select Committee on Covid-19 meets today (10am). Witnesses will be Treasury and ATO.

Key economic related points from the PM’s conference yesterday 03/05/2020:

• Just over 1.5 million Australians have applied for JobSeeker – 900,000 claims have been processed in the past six weeks
• Unemployment is expected to rise to 10 per cent
• 650,000 businesses have applied for JobKeeper
• 950,000 Australians have requested early super access
• 340,000 businesses have received a cash flow boost ($6 billion)
• 6.8 million Australians have received the one-off payment
• Net overseas migration to fall by a third on the 18/19 levels in 19/20 – and much more the following year

This morning 04/05/2020:

• US Secretary of State Pompeo claims ‘enormous evidence’ that virus originated in Wuhan lab, and that it was ‘man-made’.
  • Contradicts official US intelligence community assessment that Covid-19 ‘was not man-made or genetically modified.’
  • Pompeo has also claimed that ‘China has a history of infecting the world’
• Liberal Senator Sarah Henderson says all virus research with foreign nationals should be halted until a safety and national security review is done. (Australian).
• South Australia set to remove intrastate travel ban within days, and encourage citizens to stay in beach towns, wine regions and holiday homes. (Australian)
• Spending per person has declined 20 per cent since pre-pandemic levels, and spending has reduced as the crisis has progressed, according to AlphaBeta. (SMH)
• ALP Home Affairs shadow Keneally’s call for reduced migration has received cautious support from unions but some internal criticism for moving beyond party position (SMH):
  • the issue had been discussed within shadow Cabinet but no policy decision had been made, according to multiple senior sources.
  • Michelle Grattan says that the speech was cleared with Labor leader Albanese’s office.
• Centre Alliance Senator Rex Patrick has written to Minister Cormann urging that government procurement rules be changed to favour Australian suppliers. (SMH)
• A group of countries including Australia have been discussing building business and tourism ties post-crisis, including opening up their borders to each other to each other over time. (WSJ)
  • They are deemed to be countries that have made progress in combating the virus – Australia, Austria, Israel, the Czech Republic, Denmark, Greece and New Zealand.
  • Austria’s Chancellor Kurz initiated the discussions; their first virtual meeting was last week, and they will meet every two weeks by teleconference.
• British Cabinet Minister Gove says the government is looking at staggered work shifts to reduce load on public transport at any one time.

• PM says National Cabinet will discuss the baseline restrictions in week beginning May 11.
  wants domestic travel opened soon, but international travel will remain restricted: ‘I can’t see international travel occurring anytime soon.’ (except for NZ)
• ‘government sources’ say May 11 week meeting may see restrictions limiting gatherings to two or three people lifted to larger groups such as ten. (Australian)
• China developments:
• Coalition backbenchers (Hastie, Wilson, Canavan) express anger that Twiggy Forrest invited Chinese Consul-General to speak at a Ministerial press conference. (Australian)
• Health Minister Hunt has stated that it is not the government’s position that the virus began in a Wuhan wet market, that the original source ‘has not been determined,’ but that it was early spread within a wet market. (Australian)
• PM Morrison has told Cabinet that there is no evidence to support the ‘Wuhan laboratory’ theory of Covid-19 origins, according to SMH.
• Sarah Henderson MP (Lib, Corangamite) has called for Victoria to end its Belt and Road agreement with China. (Australian)
• Tasmanian Premier Gutwein will today announce plans for relaxations, including National Parks and green spaces. (Mercury)
• NT Chief Minister Gunner will release a road map for lifting restrictions, with the goal of normality by early June. (Australian)
• A NSW Cabinet-in-confidence document says outdoor gathering will be the next freedom, along with outdoor gym equipment and playgrounds. (Daily Telegraph)
• Allowing larger outdoor gatherings slated for next month. The document presents a matrix of economic benefit, well-being benefit, and Covid-19 risk.

COVID-19: Update 29/04/2020

• More on the story in NSW on a construction stimulus. Includes ‘fast tracking’ of developments including Ivanhoe Estate a public housing renewal project awarded to a consortium led by Frasers in August 2017.  https://www.smh.com.au/politics/nsw/nsw-government-fast-tracks-key-projects-to-boost-economy-20200428-p54nx8.html
• The Anglicare rental snapshot will be published tomorrow
• Education Minister Dan Tehan is pressing private schools to return to classroom teaching by June 1 using funding timing as incentive.

• Health minister Greg Hunt says US authorities would not be able to access data collected by COVIDSafe app, based on advice from Attorney General.
  • Hunt: ‘there is no application to the US law in relation to this app… In any event, the Biosecurity Act determination trumps it.’ (SMH)
• China reverberations:
  • Chinese Embassy leaks conversation with DFAT Secretary Frances Adamson; DFAT objects to breach of protocol and questions account.
  • Chairman of National Foundation for Australia-China Relations, Warwick Smith, stepped down weeks ago, understood to have ‘held concerns’ about the new body. (Australian)
  • Andrew Hastie MP suggests that Australia should take back the Port of Darwin to reassert our sovereignty. (DT)
• Former Treasury Secretary Ken Henry says government response has been ‘very good’. (ABC RN)
  • Expects that government will be looking at adjusting JobKeeper to wind back early if unused.
  • Doubts that JobSeeker will go back to original level, and says it shouldn’t.
• And the FT has Bondi Beach on the front page.

Covid-19 update: 28th April 2020

• The Senate Select Committee on Covid-19 will sit today (10am):
  • focus will be on the economic response, including JobKeeper and super withdrawal.
  • Witnesses will include Treasury Secretary Steven Kennedy
• The government will release a new set of economic forecasts in June, following National Accounts. There will also be a statement to Parliament on May 12 outlining effects on economy, including the total amount spent by government. (AFR)
• Former Productivity Commission chief Peter Harris (he led the inquiry into the PC social housing element of the choice and competition) has been appointed CEO of the National Covid-19 Co-ordination Commission. (AFR)
  • signals a significant role for that body in shaping agenda in direction of economic reform
• Foreign Minister Payne has accused China of ‘economic coercion’ after they raised the prospect of consumer boycotts yesterday.
• State Premiers are enjoying high levels of satisfaction, according to Newspoll. McGowan (WA) 89%, Gutwein (Tas) 84%, Andrews (Vic) 75%, Berejiklian (NSW) 69%, Marshall (SA) 68%, Palaszczuk (Qld) 55%. (Australian)
• Essential Poll finds 70 per cent believe the government’s handling of crisis has been good (up from 45 per cent a month ago). (Guardian)
  • 64 per cent oppose companies registered in tax havens getting government support.
• Mike Kelly MP (Eden-Monaro) expected to announce retirement later this week, which will trigger a by-election within months. (AFR)
  • Contenders speculated. ALP: State MP Tara Moriarty, former Senator Ursula Stephens, businessman Garth Morrison, tourism consultant Leanne Atkinson. Coalition: State Nationals leader John Barilaro, Senator Jim Molan, state MP Andrew Constance.

Covid-19 update: 24th April 2020

• QLD legislation passed Wednesday with adjustments that appear to be in response to the REIQ concerns
• WA package announced yesterday  – Support for tenants facing financial difficulty due to COVID-19 –  $30 million for grants of up to $2,000 for residential tenants who have lost their job and face financial hardship due to COVID-19,  $100 million in land tax relief grants available for commercial landlords who reduce rent for small business tenants impacted by COVID-19 and $24.5 million support package to assist the building and construction industry to maintain a skilled workforce and support apprentices and trainees
  • Under the scheme, grants equivalent to four-weeks’ rent up to a maximum of $2,000 will be paid directly to the tenant’s landlord, to contribute to the tenant’s rental payments. The grants will be provided in addition to rental reductions negotiated between tenants and landlords. The residential rent relief grants will be administered through the Department of Mines, Industry Regulation and Safety (DMIRS), with applications opening from May 1, 2020. The scheme will be available to tenants or sub-tenants who have lost their job, applied to Centrelink for income support, have less than $10,000 in savings, and are still paying at least 25 per cent of their income in rent. For more information on eligibility criteria and how to apply, visithttp://www.dmirs.wa.gov.au/covidrenting
• PM and Treasurer both mentioned the Productivity Commission’s Shifting the Dial Report (2017) as guiding their future reform agenda.
  • (https://www.pc.gov.au/inquiries/completed/productivity-review/report/contents)
• National Cabinet meets this morning at 10am.
• One Nation is expressing caution about company tax cuts or fast-tracked income tax cuts (because of debt concerns), as well as industrial relations reform (‘don’t want to see workers worse off’). Other Senate cross benchers – Centre Alliance and Jacqui Lambie – have said that they will approach proposals with an open mind. (AFR)
• The Big Four banks will establish hotlines for businesses needing bridging finance, and have promised to expedite applications.
  • The Australian writes that the move came after ‘a furious PM vented his anger at the Big Four’ to the Tax Commissioner Jordan and the Treasurer, who then secured the agreement from the banks.
• The Western half of Australia – WA, NT and SA – could potentially be first to ease because of their low infection rates, according to one of the government’s chief modellers Prof. James McCaw. (AFR)
• Environment Minister Sussan Ley says she is looking at making legislative changes to get rid of green tape. ‘The PM says we need to look at everything with fresh eyes, and coming out of Covid-19 there is no better candidate than the twenty year old Environmental Protection and Biodiversity Conservation Act.’ (The Australian)
• Tony Abbott says that the road out should mean rejecting a ‘scrooge-like concern over dollars and sense’ and less ‘dogma about the size of government’ from the centre-right. Suggests that instead of ending the double-dole in September it should be turned into a wage subsidy for older people and a part-time environmental job with local councils for younger people. (Australian)
• There are suggestions Parliament could return on week starting 11 May.

Covid-19 update: 23rd April 2020

• PM Morrison is lobbying other leaders (Merkel, Macron, Trump) to reform the WHO to enable a more pro-active approach (like UN weapons inspectors). The UK and France have said the priority now is dealing with the crisis rather than investigation. (ABC)
• Considerable speculation regarding possible tax reform:
  • Chair of NCCC Nev Power has downplayed company tax cuts as ‘not very targeted’ and says the priority must be to encourage investment. ‘We should be looking at incentivising businesses to invest here in Australia.’ Nominated accelerated depreciation and investment allowances. (SMH)
  • Former Treasurer Costello says that the government should stick to its income tax cut timetable and ‘even look at accelerating it.’ Costello also said that red tape should be cut, nominating the responsible-lending laws as ‘thoroughly inappropriate to the circumstances we now find ourselves in.’ (Australian)
  • Former Treasury Secretary Ken Henry says four priorities for tax reform – (1) a business cash-flow tax to replace GST, payroll taxes and taxes on insurance (2) progressive land tax to replace stamp duties (3) road user charges to replace fuel excise (4) scholarships, pensions and allowances to be exempt from tax. (AFR)
• Senator Dean Smith has proposed that property investors have their loans converted to interest only mortgages by banks. Senator Smith said that banks might need to be brought in front of a Senate Committee to explain their conduct through the crisis.
• Former senior Treasury official Greg Smith has called for a Budget statement next month, so that we are not ‘running the country blind.’ Smith also said that politicians must be clear that ‘tax reform is not just tax cuts’ and that some taxes will have to rise. (AFR)
• Labor says governments should take an equity stake in all ‘crucial’ businesses facing Covid-19 hardship. (AFR) Shadow Employment and Industry Minister O’Connor nominated advanced manufacturing, including pharmaceuticals, food manufacturing, textiles and clothing, vehicle parts, non-airline transport such as rail freight, and metal work.
• Senate Select Committee on Covid-19 has its first hearing today (10am). First witness will be CMO Brendan Murphy.

Covid-19 update: 21st April 2020

• Virgin Australia set to call in administrators, after formal pleas for government assistance were knocked back yesterday. Two serious bidders believed to be in play: Australian private equity firm BGH and a consortium with Etihad. (Australian)
• RBA Governor Lowe is expected in a speech today (3pm) to appeal for further policy reform to deal with the drop in business investment.
• National Cabinet meets today at 10am.
  • It will relax ban on elective surgery, allowing IVF, colonoscopies, dental surgery, knee and hip replacements and other category two procedures. (AFR)
• Federal Government is planning to legislate to assuage privacy concerns around the new Covid-19 Trace App. (AFR)
  • Essential Poll finds that 38 per cent of Australians would download app, 33 per cent won’t (poll taken last week under assumption of geo-location). (Guardian)
  • The Cyber Security Co-operative Research Centre, tasked with reviewing the App, says it has found ‘nothing particularly disturbing.’
• Labor will move a disallowance motion in the Senate to reverse the government move to fast-track enterprise agreement voting period to 24 hours. It would require the support of cross bench to succeed (One Nation and Centre Alliance views unknown). (AFR)
• Ongoing issues regarding JobKeeper:
  • complaints that some employers are misusing JobKeeper, refusing to apply if staff don’t agree to new conditions, or refusing to apply if staff don’t increase hours (AFR)
  • concerns that partnerships can only access JobKeeper benefit for one partner (SMH)
• Industry Super Australia modelling finds more than one million Australians intend to withdraw cash from their funds that they are not entitled to. (DT) (ATO had received over 600K applications at weekend but not all will be entitled
• Industry Super Australia chief Greg Combet has downplayed liquidity fears in the sector. Also flagged greater public-private approaches to building national infrastructure: ‘One thing we have to crack is a better partnership with governments in providing capital to achieve projects that are nationally important and that are going to help on the road to economic recovery.’ (AFR)
• US oil prices plunge, futures moving below zero for oil being delivered in May. (WSJ)

Covid-19 Update 16th April 2020

VIC announced its housing eviction etc package yesterday. Rent increases and evictions will be illegal for six months and tenants will be able to access assistance payments of up to $2000 from a $80M fund – Applications from those who earn less than $100,000 and have less than $5000 in savings. The payment will go direct to landlords

https://www.smh.com.au/national/victoria/landlords-and-tenants-to-share-in-500-million-rent-rescue-package-20200415-p54jzo.html

NSW issued a press release about progress on its ‘targeted stimulus program’.  A $60.5 million program for maintenance works and upgrades on public housing properties. Work includes pausing plans to redevelop the ageing Arncliffe Estate in Sydney’s South, to provide emergency accommodation in response to the crisis. Billbergia Group, and Evolve Housing the development partners will be involved in scoping and delivering

A similar stimulus works program costing $13.5m is being undertaken through the Aboriginal Housing Office with a focus on improving living conditions and reducing cost of living pressures for Aboriginal tenants in regional and remote NSW.

• National Cabinet meets today at 10am, will discuss school reopening and broader issues.
• Covid-19 crisis has caused significant population decline (Australian).
  • Down around 300,000 temporary visa holders already (temporary workers, tourists, students), according to Acting Immigration Minister Tudge.
  • Predicted to decline by another 300,000 by end of the year according to former Immigration Dept official Rizvi.
• UBS predicts house prices to decline by 10 percent, with new housing starts to drop from 174,000 in calendar 2019 to around 120,000 in 2020. (AFR)
• RepuTex predicts power bills to fall by 20 per cent over two years (lower demand, lower energy prices, more supply from renewables) (AFR)
• Australia Post CEO Christina Holgate accused of political interference, after emails to colleagues revealing discussions with Queensland Premier Palaszcuk. Noting that the Premier was keen to further catch-up to understand ‘how we could help with her upcoming election,’ Holgate was looking to have AP assist. Holgate denies impropriety. (Australian)
• Federal government recommits to WHO funding, but backbenchers such as Dave Sharma and Sen Fierravant-Wells are looking for a review when the crisis is over. (SMH)
• YouGov survey reveals community anxieties  – one in two people feeling isolated, 57 per cent suffering stress, 27 per cent say relationships are more strained (Daily Telegraph)
• Germany says some small shops can reopen next week (including bookstores, car dealers and bike shops).
• G20 Finance Ministers have agreed to suspend debt repayments  – developing countries – until the end of the year.

• $50 million of relief to any business that pays license fees to the NSW Government – 200,000 businesses will no longer pay these taxes (License fees will be predominately paid by tradies – Construction industry is so important to the recovery of the state)
• IMF predicts Australian economy to shrink 6.7 per cent this year, followed by rebound of 6.1 per cent next year (if global pandemic peaks within three months and social distancing eases in second half of his year.) Predicts global economic impact as worst since Great Depression.
• Trade Minister Birmingham will today announce a $500m credit facility to exporters. The Covid-19 Export Capital Facility will extend loans of between $250,000 and $50m to SMEs that had been profitable prior to pandemic but are now struggling to get credit.
• CMO Murphy confirms a tracing app will be offered to Australian public. Probably based on Singapore app, which works through Bluetooth, and records contacts with others with app. De-identified data, opt-in, and the government hopes 40 – 60 per cent of people will take it up.
• Prime Minister Morrison says easing priorities will be getting people back to work rather than leisure, and on areas of low risk, high value, nominating manufacturing, infrastructure, agriculture, and construction. From there on people may do short office work weeks or rosters.
• The PM will today use a Facebook video to urge teachers to return to school to ensure childrens’ education is not impaired.
• Industry Minister Andrews says she will use federal government procurement power to assist sectors such as medical supplies. ‘Governments historically don’t like to pick winners. But there are pretty critical industries emerging that we can build on.’ Andrews told AFR that ‘We will use procurement as a real option.’
• Office of Budget Responsibility in United Kingdom (equivalent of our Parliamentary Budget Office) predicts British economy will shrink by 35 per cent if tight social distancing remains in place for three months with partial lifting after that.
• Debates around goals – Greg Hunt said our goal is now ‘effective eradication’ of Covid-19. This reflects the unexpected success in reducing cases, with the possibility of complete eradication hovering into view. It’s a strategy increasingly popular in parts of the medical establishment.
• Of course moving to an ‘Effective Eradication’ goal would entail very different economic/business impacts compared to the strategy of Flatten the Curve, then Ease.
• The Grattan Institute support the eradication – wrote on this issue yesterday (CEO John Daley and Health Program Director Stephen Duckett). See here: https://grattan.edu.au/news/australias-endgame-must-be-total-elimination-of-covid-19/
  • Grattan explicitly calls for ‘elimination,’ rather than what they call the ‘Goldilocks’ strategy (ease and restrict to manage Covid-19 at low level)

COVID-19 Housing Update (NSW): 14th April 2020

The main development has been the NSW Government announcement today on land tax relief for residential landlords (https://www.smh.com.au/politics/nsw/nsw-unveils-440m-rental-rescue-package-20200412-p54j65.htm). Parliament will be recalled to pass. The available detail is gleaned from the news article and the press conference.  It is in place for six-months for tenants facing financial stress due to COVID-19 and includes an interim moratorium on applications for forced evictions due to rental arrears. There will be an obligation on both parties to negotiate and tenants will be protected from eviction until NCAT is satisfied negotiations are concluded. Unpaid rent will accrue as rent. In addition residential landlords could be eligible for a land tax waiver or rebate of up to 25 per cent if they passed the equivalent saving on to tenants in financial distress – think defined as people losing at least 25% of their income. Additional mediators will be appointed to assist with negotiations. Tenants affected will not go onto blacklists.

Of course not all landlords pay land tax – owners of a single property may well not reach the land tax threshold of circa $750K – on unimproved land.

COVID-19: A Business Guide to Who’s Who in Government Response

COVID-19 Update: 6th April 2020

Australian Bankers Association says banks will offer advances and loans to business to cover wages to bridge gap until JobKeeper comes in.
Parliament meets on Wednesday:
Media speculation that Govt looking to expand JobKeeper to more casuals, but Attorney General Porter pushed back on this today.
The Treasurer last night allowed charities to access JobKeeper with a 15 per cent decline in turnover Covid-19-related.
Parliament to authorise at least one Committee to scrutinise Covid-19 health and economic responses. Could be either a Senate select committee (usually chaired by non-government Senator), or a Joint Committee agreed by both Houses of Parliament (with a Chair from government Party), or both.
Super fund issues:
360,000 super fund members have registered with ATO to withdraw money (Australian)
Chairman of House Economics Committee, Tim Wilson, has written to industry super funds reading possible liquidity issues and unlisted asset valuations.
Communications Minister Paul Fletcher has written to state governments to exempt telcos, postal services and media organisations from restrictions on movement (The Age)
Australian Institute of Company Directors has written to the Treasurer asking for an emergency amendment to the Corporations Act to give safe harbour against legal action based on earnings guidance and forward looking statements (AFR)
Financial Review’s economists’ survey March quarter median forecasts:
3.9% contraction in calendar 2020, rebound in 2021 of 3.2%
unemployment up to 8.5% by June, fall back slightly to 8% by December
Newspoll results:
84% are worried about impact on economy
worried about catching virus (67%), govt debt (38%), losing your job (36%), super balance drop (35%)
high support for JobKeeper scheme (86%)
surge in support for Prime Minister (up 20 pts); slight lift to Coalition (up 2)
Department of Defence has banned personnel from using Zoom re security concerns (Australian)
NSW to create a new Department, Resilience NSW, devoted to disaster preparedness and recovery

Increasing discussion about Covid-19 survivors being given ‘immunity passports’ to work in certain roles.