covid-19: stimulus and re-opening of the economy · 2021. 1. 24. · june 18, 2020 2 economic...

Craig James, Chief Economist Twitter: @CommSec IMPORTANT INFORMATION AND DISCLAIMER FOR RETAIL CLIENTS The Economic Insights Series provides general market-related commentary on Australian macroeconomic themes that have been selected for coverage by the Commonwealth Securities Limited (CommSec) Chief Economist. Economic Insights are not intended to be investment research reports. This report has been prepared without taking into account your objectives, financial situation or needs. It is not to be construed as a solicitation or an offer to buy or sell any securities or financial instruments, or as a recommendation and/or investment advice. Before acting on the information in this report, you should consider the appropriateness and suitability of the information, having regard to your own objectives, financial situation and needs and, if necessary, seek appropriate professional of financial advice. CommSec believes that the information in this report is correct and any opinions, conclusions or recommendations are reasonably held or made based on information available at the time of its compilation, but no representation or warranty is made as to the accuracy, reliability or completeness of any statements made in this report. Any opinions, conclusions or recommendations set forth in this report are subject to change without notice and may differ or be contrary to the opinions, conclusions or recommendations expressed by any other member of the Commonwealth Bank of Australia group of companies. CommSec is under no obligation to, and does not, update or keep current the information contained in this report. Neither Commonwealth Bank of Australia nor any of its affiliates or subsidiaries accepts liability for loss or damage arising out of the use of all or any part of this report. All material presented in this report, unless specifically indicated otherwise, is under copyright of CommSec. This report is approved and distributed in Australia by Commonwealth Securities Limited ABN 60 067 254 399, a wholly owned but not guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. This report is not directed to, nor intended for distribution to or use by, any person or entity who is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or that would subject any entity within the Commonwealth Bank group of companies to any registration or licensing requirement within such jurisdiction.

Economics | June 18 2020

COVID-19: Stimulus and re-opening of the economy Economic trends On April 20, May 7 and May 25 CommSec outlined the stimulus measures provided by Federal, State and

Territory governments to support businesses and individuals deal with the consequences of the COVID-19 coronavirus. On May 7 and May 25 CommSec also highlighted the plans outlined by the State and Territory governments to re-open their economies. This report updates the information.

Stimulus and support measures: Federal, State and Territory Governments have committed $295 billion or around 15 per cent of GDP in support and stimulus measures in the wake of COVID-19.

Government decisions on easing lockdown restrictions have implications for all sectors.

What does it all mean? Australia has made good progress in stopping the spread of the COVID-19 virus. So now States and Territories

are firmly focussed on re-opening the economy. The health risks are easing but the economic risks are rising. So it is a case of finding some balance.

The COVID-19 cases may lift again as the economy re-starts, but the aim is to keep the process manageable. Certainly the facilities and procedures are now in place to deal with any modest lift in cases.

The re-start timetable varies across states and territories. The number of active cases is zero or near zero in the Northern Territory, ACT and South Australia. Western Australia and Queensland are approaching zero. NSW and Victoria have a bit further to go. But importantly there is no single road map to follow – as evidenced by the re-emergence in recent days of the virus in New Zealand.

The re-booting of Australia Guidelines for COVIDsafe workplaces and activities are available. And the information and guidelines will be

expanded over time. https://www.safeworkaustralia.gov.au/covid-19-information-workplaces In the transition to lockdown, there were limits

imposed on groups of more than 500 people, and then this was tightened to groups of 10 and then to groups of 2 (numbers varied across states and territories).

On May 5, The Prime Ministers of Australia and New Zealand agreed to commence work on a trans-Tasman COVID-safe travel zone – easing travel restrictions between Australia and New Zealand.

Also on May 5, “National Cabinet agreed to establish a three step framework to gradually remove baseline restrictions to enable Australians to live in a COVID-19 safe economy. Details will be determined by National Cabinet on Friday 8 May 2020.

June 18, 2020 2

Economic Insights. COVID-19: Stimulus and re-opening of the economy

Individual states and territories will determine the timeframe for graduating between steps and individual restrictions to remove. This reflects the fact that states and territories are at different stages of the pandemic response, with 6 of 8 states and territories now recording multiple zero case days.

National Cabinet noted that the Northern Territory has announced that by 5 June 2020, it will be able to remove many restrictions, while maintaining social distancing, hygiene and travel restrictions.”

On May 8 National Cabinet outlined a three stage process for opening the economy. The Prime Minister said, “Step 1 will focus on carefully reopening the economy, and giving Australians opportunities to return to work and

social activities, including gatherings of up to 10 people, up to 5 visitors in the family home and some local and regional travel

Step 2 builds on this with gatherings of up to 20, and more businesses reopening, including gyms, beauty services and entertainment venues like galleries and cinemas.

Step 3 will see a transition to COVID safe ways of living and working, with gatherings of up to 100 people permitted. Arrangements under step 3 will be the ‘new normal’ while the virus remains a threat. International travel and mass gatherings over 100 people will remain restricted.”

https://www.pm.gov.au/sites/default/files/files/covid-safe-australia-roadmap.pdf https://www.pm.gov.au/sites/default/files/files/three-step-framework-covidsafe-australia.pdf On June 12, National Cabinet reconfirmed the commitment to the 3 step framework for a COVID-safe Australia to

be completed in July 2020. All states are now in Step 2 or 3, the number of new cases has remained low, and localised outbreaks have been

responded to effectively. Active case numbers continue to drop, community transmission remains low, and we are starting to see days with no new cases in most parts of the country. This progress needs to be maintained in order to make further economic and social gains – by living and working in COVID-safe ways as restrictions continue to ease.

National Cabinet agreed to further changes based on AHPPC advice to enable extended removal of restrictions under Step 3 for indoor gathering density rules and reopening ticketed and seated outdoor events, including in stadiums.

Indoor Gatherings National Cabinet agreed to remove the 100 person limit on non-essential indoor gatherings under the Step 3

Framework and replace it with: 1 person per 4 square meters (sqm); staying 1.5 metres away from other people whenever and wherever possible; maintaining good hand washing and cough/sneeze hygiene; staying home when unwell, and getting tested if you have respiratory symptoms or a fever; downloading the COVIDSafe app to allow identification and traceability of people that have been in contact

with a confirmed COVID case; and developing COVIDSafe plans for workplaces and premises.

States and territories will determine when to implement these changes under Step 3. National Cabinet requested further advice from the AHPPC on the 1 person per 4 sqm density rule and

application for small premises. National Cabinet reiterated that it is vital for our

society and our economy that we can live with this virus, and keep ourselves and others safe – we cannot risk a second wave and having to step backwards, especially now that we are making such good progress.

National Cabinet reiterated that high risk venues such as nightclubs do not form part of Step 3 and will be considered following further advice from medical experts.

Outdoor events including stadiums For outdoor venues up to 40,000 spectator

capacity, ticketed and seated events will be able to be held in front of a crowd of no more than 25 per cent of capacity under Step 3.

States and territories will make decisions on

June 18, 2020 3


when to move to Step 3 under COVIDSafe plans. At a minimum, COVID-Safe arrangements must be maintained including:

1 person per 4sqm; staying 1.5 metres away from other people whenever and wherever possible; maintaining good hand washing and cough/sneeze hygiene; staying home when unwell, and getting tested if you have respiratory symptoms or a fever; and downloading the COVIDSafe app to allow identification and traceability of people that have been in

contact with a confirmed COVID case. For outdoor venues of more than 40,000 spectator capacity, further advice is being sought from the AHPPC, with

arrangements to be settled by the states and territories on a venue by venue basis. National Cabinet reiterated that high risk outdoor events without ticketed seating such as music festivals do not

form part of Step 3 and will be considered following further advice from medical experts.

What has each state and economy announced so far? NSW On April 28, the Premier announced the following: “From Friday, 1 May up to two adults and their dependent

children will be allowed to visit another household. We will see a return of face-to-face teaching from 11 May, and then will consider accelerating a full return to

school as soon as possible. There have never been restrictions in NSW on what people can and cannot buy, however there may be increased

retail activity, with some businesses choosing to re-open. It is important these shops maintain social distancing and hygiene requirements.”

The full list of the rules, as they were at that time, is here: https://www.nsw.gov.au/covid-19/what-you-can-and-cant-do-under-rules On May 3, the Treasurer said agents and vendors able to hold traditional property inspections and on-site

auctions from May 9. On May 10, the Premier announced that gatherings of 10 people will be permitted from May 15. On May 19 it was announced that students would return to schools full-time on May 25. On May 20, the Premier said intra-state travel restrictions would be lifted from June 1, 2020. Museums, galleries

and libraries will re-open the same day. On May 22, the Premier announced that from June 1 it will “allow pubs, clubs, cafes and restaurants to have up to

50 customers.” From Monday 1 June 2020, the following services and activities are allowed in NSW:

pubs, clubs, casinos, cafes and restaurants can have up to 50 customers in seated food and drink areas; travel to regional NSW for a holiday; up to 50 people can attend places of worship and attend a funeral; up to 20 guests can attend weddings; zoos, aquariums and reptile parks can

open; beauty, nail, tanning and waxing salon

operators can begin treatments; camping grounds and caravan parks

can open; and museums, galleries and libraries can

reopen to the public. From Saturday 13 June 2020, the following

will be allowed in NSW: fitness, gymnasiums, Pilates, yoga

and dance studios can reopen with up to 10 people per class and 100 people in an indoor venue;

community centres, including their recreational facilities can reopen;

some indoor recreational facilities

June 18, 2020 4


including pools and saunas can reopen with restricted numbers; and tattoo and massage parlours can reopen with up to 10 clients.

The four sqm rule must be applied at all times. From June 13, with food courts allowed to reopen, the number of people allowed to visit homes increased from 5

to 20, and the number of people allowed to gather outdoors increased from 10 to 20. Adult and kids’ sport and community sport competitions can restart from Wednesday 1 July 2020. Victoria On May 1, Premier Daniel Andrews said: “The more tests we can get done in the lead-up to 11 May, the more options we will have to potentially ease

some of the rules,” he said. “If we are going to change those settings, then we need to be really clear on how much virus is out there in the

Victorian community that we didn’t previously know about.” Mr Andrews is aiming to complete 100,000 COVID-19 tests before May 11 to allow an easing of restrictions. On May 11, Premier announced easing of restrictions from midnight May 12 to allow maximum gathering of up to

ten outdoors and having up to five visitors in your home. Walking groups, fishing, hiking and golf also permitted. On May 17 the Premier announced “From 1 June – cafes, restaurants and pubs will be able to reopen their doors

to serve meals to up to 20 customers at a time per enclosed space. From 22 June – this could increase to up to 50 patrons. During the second half of July, up to 100.”

On May 24 the Premier announced “from Tuesday – and in line with the return to face-to-face learning in school – outdoor playgrounds, skate parks and outdoor communal gym equipment will reopen.

Then, from 11:59pm on 31 May, you’ll be able to have a total of 20 people in your home. For a family of five, that means 15 visitors. Outdoor gatherings can also increase to 20.

Overnight stays can resume at private residences. And importantly, for our tourism industry, so can overnight stays in accommodation.

In good news for those itching to pitch their tent, this will also apply to campgrounds and caravan parks – but not with communal facilities like kitchens or bathrooms so we can stay safe.

Limits on our most significant ceremonies will be lifted, with up to 20 people allowed at weddings – plus the celebrant and couple – and up to 50 people allowed at a funeral, in addition to those required to conduct the ceremony. Up to 20 will be allowed at other religious ceremonies, in addition to those required to perform the service.

Libraries, youth centres and other community facilities will be able to open with no more than 20 people in a single area, plus those needed to operate the space. That means men’s sheds and arts and crafts classes can resume.

From 11:59pm on 31 May, entertainment and cultural venues like galleries, museums, drive-in cinemas and historic sites will be able to open their doors, alongside zoos and outdoor amusement parks. Physical distancing and a limit of up to 20 patrons per space will apply, and indoor venues will be required to keep customer contact details.

Swimming pools will also open with limits of 20 people and additional safety requirements in place. Community sporting activities will also be permitted with up to 20 people in undivided spaces, provided the sport is outdoors, non-competition, non-contact, and people are able to play 1.5 metres apart. Restrictions on professional sport will remain unchanged.

Beauty and personal care services like nail salons, spas, tattoo parlours will be able to open with up to 20 customers per space – with customer contact details required to be kept.

Auctions and open for inspections will also be subject to the 20-person limit – plus those required to conduct the activity – with agents also required to keep the contact details of everyone who attends.

Non-food and drink market stalls will also be able to open from 11:59pm on 31 May. If community transmission rates continue to remain low and testing rates continue to remain high, we will look to

further relax restrictions from 22 June. From that date, indoor fitness and recreation facilities will open with up to 20 people per space and up to 10

people per group or activity at any one time. Up to 50 people will be permitted in restaurants, cafes, galleries, museums and for the first time, cinemas and

theatres. And for those eager to hit the slopes, the ski season will open slightly later this year on 22 June.” https://www.premier.vic.gov.au/statement-from-the-premier-40/ From June 1 “we’ll no longer be giving Victorians a definitive list of reasons to leave home. If you’re currently

working from home – you must keep working from home.”

June 18, 2020 5


Queensland On April 26 Premier Annastacia Palaszczuk announced: “From 11.59pm Friday, May 1, Queenslanders will be able to leave their homes for recreation and the distance

they can travel has been extended. For example, Queenslanders will be able to enjoy some relief from stay-at-home rules and:

Go for a drive; Ride a motorbike, jetski or boat for pleasure; Have a picnic; Visit a national park; and Shop for non-essential items

But there are three conditions that apply linked to the above: Social distancing and hygiene must be maintained; You have to stay within 50km of home; and Outings are limited to members of the same household or an individual and one friend.”

On May 1 Premier Annastacia Palaszczuk cleared the way for the NRL season to resume on May 28th, dependent on Chief Health Officer advice that the league’s plan is workable, and the NRL’s assurance that players won’t break restrictions. The Premier said the decision gives clubs permission to travel across the Queensland border to play because they are working and because they are in quarantine. The Premier also said work was being done on other issues such as dining out.

On May 4, the Premier announced plans for schools May 11: Kindy, Prep, Years 1, 11 and 12 return to learning at school; May 15: Assess state-wide response to easing of restrictions; and May 25: Proposed re-opening to remaining students in remaining grades.

On May 5 the Premier issued a media release noting that “Planning continues for the resumption of hospitality and tourism business activity.”

On May 8 the Premier maps road to easing restrictions allowing gatherings of up to 10 people from midnight May 15.

From June 16 funerals may be attended by up to 100 people. South Australia On April 27 schools opened for Term 2 on the advice of the Chief Medical Officer. On May 3 Premier Steven Marshall announced:

“To guide the delicate process of both continuing to move out of the COVID-19 health emergency and restore the social and economic health of the State, the Marshall Government has established a broad high-level transition team.

While maintaining the vigilance of our public health response, the highly credentialed Transition Committee will look at which restrictions should be eased and in what order, as we take the next steps to return the State’s economy and community way of life to the new normal.”

From May 22 cafes & restaurants can seat up to 20 people. On May 25 Premier Steven Marshall announced: “Pubs, gyms, cinemas, places of worship, beauty salons and other sites will now be permitted to have up to 80

people on their premises from June 1 as long as they comply with appropriate safeguards, Premier Steven Marshall has today announced.

In other welcome changes, contact training and non-contact outdoor sport competitions will be able to commence from next Monday with contact competition launching from June 25.”

June 17: Premier Steven Marshall opened the state to Western Australia, the Northern Territory and Tasmania. Western Australia On April 26 Premier Mark McGowan and Health Minister Roger Cook announced an easing of restrictions:

“Indoor and outdoor gatherings for up to 10 people will be allowed including weddings, outdoor personal training, and open house or display village inspections.

Easing of some of WA's stage 3 restrictions effective Monday, April 27 2020.

June 18, 2020 6


Allows families and friends to interact more freely, with good social distancing. Schools opened for Term 2 on the advice of the Chief Medical Officer.”

“The changes, based on health advice, will mean indoor and outdoor non-work gatherings will be relaxed to enable for up to 10 persons, lifted from the two person only limit, following continued low number of new cases and the encouraging response to COVID-19 in WA.” “The new 10-person rule aligns WA with South Australia.”

May 10: The WA roadmap for easing COVID-19 restrictions. May 18: Groups of up to 20 people permitted. May 25: From May 29, the regional boundaries will be lifted except for regions that are bound by the

Commonwealth's designated biosecurity determination and 274 remote Aboriginal communities. The decision comes seven days after restrictions were eased as part of Phase 2 of the WA roadmap, which saw internal borders within Western Australia reduce from 13 to only four.

May 29: Phase 3 will come into effect from Saturday, June 6 (11.59pm Friday, June 5). It includes: non-work indoor and outdoor gatherings of up to 100 people at any one time, per single undivided space, up

to 300 people in total per venue (100/300 rule); food businesses and licensed premises may operate with seated service; alcohol may be served without a meal at licensed premises (patrons must be seated); food courts can reopen with a seated service; beauty therapy and personal care services to reopen; saunas, bath houses, float centres, massage and wellness centres to reopen (100/300 rule); galleries, museums, theatres, auditoriums, cinemas and concert venues can reopen (during any performance,

the patrons must be seated. (100/300 rule)); Rottnest Island to reopen to the WA general public; Perth Zoo to open with no patron limit for the whole venue (the 100/300 rule applies to indoor spaces and

cafés/restaurants); wildlife and amusement parks can reopen (100/300 rule); arcades (including pool/snooker, ten pin bowling, Timezone), skate rinks and indoor play centres to reopen

(100/300 rule); auction houses and real estate auctions can reopen; TAB and other gaming venues (other than the Casino which is being considered separately) are permitted to

reopen; full contact sport and training is now permitted; playgrounds, skate parks and outdoor gym equipment are permitted to be used; parents/guardians will be able to enter school grounds to drop off or pick up their children; gyms, health clubs and indoor sports centres will be able to offer the normal range of activities, including the

use of all gym equipment (gyms must be staffed at all times and undertake regular cleaning). Large community sporting facilities or wildlife parks that can accommodate more than 300 patrons, while allowing

for two square metres per patron, may be able to apply for an exemption to the 300 patron limit through wa.gov.au for a decision by the Chief Health Officer.

As part of Phase 3, Western Australia will be the first State in the nation to implement a two square metre per person capacity rule for venues, replacing the previous four square metre rule, which is the current national advice.

Tasmania On May 1, Premier Peter Gutwein announced

Additional North West COVID-19 measures to be lifted: “I am pleased to announce that the additional North West COVID-19 safety measures will be lifted from 12.00am this Monday, 4th May.”

The Premier said at the same time “The Government will make decisions about statewide restrictions in the lead up to 15th May.”

June 18, 2020 7


On May 8 Premier releases Tasmania’s Roadmap to Recovery. From May 11 relaxation on visits to national parks, aged care, TAFE campuses.

Stage one restrictions ease from May 18. Gatherings increasing to 10 people (not including event or premises staff) for indoor and outdoor gatherings.

May 25 “Next steps for Tasmania’s recovery.” From June 5 the following are permitted:

10 visitors to residential premises; 20 at gatherings; 20 attendees at staffed gyms and other indoor sport facilities; Groups of 20 in outdoor sporting activities and boot camps/personal training; 20 attendees per pool; 20 attendees at community facilities; 20 attendees in each discrete area of libraries; 20 attendees at auction premises and real estate services; 20 attendees at outdoor amusement parks, arcades, play centres or similar if primarily an outdoor space; 40 attendees in hospitality venues; 40 people at religious services and weddings; 40 attendees per cinema; 40 attendees at concert venues, theatres, arenas, auditoriums, with an additional number of 20 people

specified for performers and support staff not including front of house; 40 attendees at zoos; 50 people at funerals; 80 attendees at museums, national institutions, historic sites and galleries; Beauty services open and maximum density limits apply; Markets continue to be open for fresh food and produce only; Racing to resume on 13 June, with Keno and betting services able to recommence from 3pm 5 June; Accommodation open and restrictions on boating/national parks and reserves lifted; and The State Controller has removed the travel restrictions for the Bass Strait Islands, and there will be no

requirement to quarantine for people travelling to the islands from mainland Tasmania. Importantly, visitors from interstate will be subject to the same quarantine requirements as they would be elsewhere in Tasmania.

From June 17, the following are permitted:

20 visitors to a home in addition to household members; Groups of 20 at gyms and other indoor sports facilities per separate room, up to a total of 80 attendees in

each building; Groups of 20 participating in social sports activities, including activities such as boot camps and personal

training; 20 attendees per pool; 80 attendees at community facilities; 80 attendees in libraries; 80 attendees at auction premises and real estate services; 80 attendees at amusement parks, arcades, play centres or similar if primarily an outdoor space; 80 attendees in hospitality venues, with seated service to continue; 20 attendees at bed and breakfast accommodation and short stay accommodation, consistent with residential

premises; 80 attendees at camping grounds; No limit on the number of people who can stay at accommodation venues, such as a hotel, but restricted to

80 attendees in communal areas; 80 people at religious services, including funerals and weddings; 80 attendees per cinema; 80 attendees at concert venues, theatres, arenas, auditoriums, with an additional number of people specified

for performers;

June 18, 2020 8


80 attendees at zoos; 80 attendees at museums, national institutions, historic sites and galleries; Beauty services are open and maximum density limits apply; and Markets will continue to be for fresh food and produce only.

“Stage 3 restrictions have been brought forward to 26 June and at this time, subject to public health advice and the state of play regarding the virus in other jurisdictions, we will also confirm a date when our border restrictions will be lifted.”

ACT On May 1 Chief Minister Andrew Barr announced: “…reasons for Canberrans to be outside their family home will be broadened from this weekend, allowing

Canberrans to leave their home for non-essential shopping purposes. This measure will support retail stores as they re-open (whilst maintaining appropriate physical distancing inside

their stores). Many retailers voluntarily closed their doors to support community efforts to suppress the virus. Soon many will re-open and the community is encouraged to support them whilst maintaining physical distancing.

Restrictions on gatherings inside the family home will be relaxed to allow families to visit each other with two adults plus children able to visit outside of those who ordinarily live in a property.

With travel restrictions eased in NSW, Canberrans should only travel outside of the Canberra region to visit family and friends in small groups while maintaining physical distancing. As much as possible, travel outside of the Canberra region should be carefully considered, as someone bringing the virus into the Territory from interstate remains one of the biggest threats to the ACT.”

On schools, the Chief Minister said “we are preparing to move to face-to-face delivery during Term 2 if the circumstances allow us to do that sensibly.”

From midnight May 8 gatherings, whether they are indoor, or outdoor, should be no greater than ten people. From midnight May 15 restrictions were eased includes lifting restrictions on cafes and restaurants, allowing

venues to seat up to 10 patrons at one time. On May 20 the Chief Minister said that stage two restrictions will be eased from Friday May 29. Should these

measures not result in any significant increase in cases across the Territory, the Government will move into the next phase of our recovery plan on 11:59pm 19th June. This phase will see maximum occupancy limits in some sectors, including hospitality, increase to 50 people per enclosed space. Cinemas, indoor amusement centres will also be able to reopen and there will be further easing of restrictions for gyms, health centres and community sport.

Canberra’s recovery plan: https://www.covid19.act.gov.au/resources/canberra-recovery-plan Northern Territory On April 27 Chief Minister Michael Gunner announced:

The Northern Territory Government will begin re-opening some parks from Noon on Friday 1 May. The Chief Minister outlined a transition to a “new

normal”: “This transition has three parts: Controlling the borders: to keep the Territory

safe and to stop coronavirus from spreading, our borders will stay secured.

Rapid response: a “test, trace and trap” plan to contain any future outbreak, minimising the risk to the community.

The new normal: Territorians enjoying their lives while also adhering to social distancing, cleaning and hygiene protocols.”

On April 30 the Chief Minister outlined “The Territory’s Roadmap to the New Normal” (http://newsroom.nt.gov.au/mediaRelease/33205)

June 18, 2020 9


From 1 May, Stage One adjustments will commence. Stage two activities can commence from noon, Friday 15 May. And from noon, Friday 5 June, restrictions will be eased on further indoor activities. By 5 June all Territory businesses, services, facilities and organisations should have their own COVID-19 Safety Plan.

On May 5 Chief Minister Michael Gunner announced: “The COVID-19 safety plan checklist for businesses and organisations as part of the Roadmap to the New

Normal is now available. Businesses and organisations seeking to re-open or expand operations as part of stage two of the Roadmap

can begin submitting their checklist from today, ahead of opening on 15th May.”

What are the implications for investors? The focus continues to shift from containment and suppression of the virus to rebooting the economy. The

process will understandably be long and staggered. The process will continue to differ across states and territories. The process is not without risks. But the price of delaying the reboot too long is getting higher – especially for regions dependent on interstate and international tourism.

Governments now have the processes and infrastructure in place to deal with any lift in the number of virus cases. Businesses may need information on what constitutes a new acceleration phase for cases, so they can stay on top. A reacceleration of cases could prompt a reimposition of lockdown measures or a tightening of rules and regulations.

Investors will need to particularly stay on top of daily information of virus news to gauge implications for companies, sectors and the broader market.

Craig James, Chief Economist, CommSec Twitter: @CommSec

June 18, 2020 10


Addendum: Update of stimulus/support measures Federal Government & Reserve Bank March 12: First economic package $17.6 billion (support cash flow and investment spending of business and

provide payments to vulnerable Australians) March 19: Reserve Bank monetary package includes $90 billion three-year funding facility and $15 billion from

the Government to improve access to finance. March 22: Second package $66 billion (keep business in business and keep workers in jobs) March 30: Third package $130 billion (includes new wage subsidy ‘JobKeeper’ program) Also March 2: Assistance for bushfire region around $2 billion March 11: Health response to COVID-19 ($2.4bn) March 18: $715 million airlines package March 20: $444.6 million aged care support March 28: Regional Airlines Network Support $198 million April 12: $100 million Higher Education relief Package April 13: $3 million support frontline health workers April 16: $165 million for airlines to maintain critical air routes April 28: $94.6 million support for zoos May 1: $205 million for residential aged care providers May 11: $650 million Regional Bushfire Recovery and Development Program May 15: The $48.1 million Mental Health and Wellbeing Pandemic Plan May 22: a $1.8 billion boost for road and community projects ($500 million Local Road and Community

Infrastructure Program and the bringing forward of $1.3 billion of the 2020-21 Financial Assistance Grant) On May 22: Federal Treasury and the Tax Office advised that the cost of the JobKeeper program will be closer to

$70 billion than $130 billion. “The difference between Treasury’s estimates at the time and the number of employees now accessing the JobKeeper program partly reflects the level and impact of health restrictions not having been as severe as expected and their imposition not having been maintained for as long as expected at the time.”

https://treasury.gov.au/media-release/jobkeeper-update On June 2, the Federal and NSW governments say a further $3.5 billion will be injected into the Western Sydney

Airport rail project On June 4, the $680 million HomeBuilder program was announced

NSW March 17: $2.3 billion economic stimulus package ($1.6bn tax cuts, job creation; $700m for health) March 27: 2nd stage economic package including $1 billion fund for jobs Also April 2: $750 million Small Business Support Fund (grants up to $10,000 for small business April 7: $100 million to support health workers April 9: $51 million free pre-school for six months April 13: $440 million land tax break April 15: $50 million fee waivers for trades and construction sector April 17: $82 million for council childcare centres April 20: Bushfire Industry Recovery Package April 24: $73 million mental health workers to promote metal wellness Apr 29: $250 million cleaners package for cleaning of public facilities May 6: $9 million fast-tracked program of courts and corrections facility upgrades in regional NSW May 8: new $15 million Streets as Shared Spaces program

June 18, 2020 11


May 11: $310 million in emergency drought relief May 18: $8.6 million funding boost to the Patient Experience Program, part of the NSW Government’s $800

million investment to support the health system May 19: projects in Blacktown and The Hills will be supported by the government’s $70 million Accelerated

Infrastructure Fund May 20: Close to 1000 NSW sports projects share in $4.6 million in grants for purchasing equipment, improving

facilities May 22: Fast-tracking 24 priority projects, “that could inject more than $5.37 billion into the state’s economy.” May 24: The NSW Government announced a $50 million Rescue and Restart package for NSW arts and cultural

organisations May 26: $21 million for frontline support of domestic violence victims and survivors June 9: The NSW Government's $750 million Loan Guarantee scheme June 11: $135,000 for independent brewers June 16: New Small Business Recovery Grant. Small businesses will be able to apply for funding up to $3000.

The funds are available from the existing $750 million Small Business Support Fund, which closes on Tuesday 30 June 2020.

June 16: $388 million funding for elective surgeries. The funding will focus on patients whose surgery has been delayed due to COVID-19.

Victoria March 21: $1.7 billion Economic Survival package (includes $500m Business Support Fund) April 1: $1.3 billion to create 4,000 ICU beds, equipment, capital works and training Also March 15: $100 million for elective surgery March 19: $437 million health funding April 5: $45 million for sessional kindergartens April 15: $500 million support for residential & commercial tenancies April 16: $24.5 million emergency funding April 17: $3 million family violence April 17: $260.8 million emergency funding for TAFE Apr 21: $4.7million regional newspapers April 23: Extend First Home Owner grants regional Victoria April 23: $77.5 million over 2 years for foster & kinship cases April 26: $16.8 million Arts survival package April 29: $45 million International Student Emergency Relief Fund April 30: On-Farm Drought Resilience Grant Program May 1: Expand criteria for Economic Survival package May 3: $14 million for zoos May 3: $40 million from the Business Support Fund will be available to licenced venues May 5: $491 million in tax relief, and freeze a host of fees, charges and levies May 18: first part of Building Works package, which will provide $2.7 billion towards shovel-ready projects. The

package will create 3,700 direct jobs. May 19: $48.4 million in water projects as part $2.7 billion Building Works package May 19: $350m Victorian Higher Education State Investment Fund to support universities with capital works,

applied research and research partnerships May 22: The “Earth Resources Regulation will defer the collection of rent and annual fees worth $3.5 million until

January 2021 to aid the immediate cashflow of mines, quarries and exploration companies.” May 27: 78 schools to share in $5.94 million Planned Maintenance Program June 4: $25 million to bring forward new and improved community facilities

June 18, 2020 12


Queensland March 24: $4 billion package (support health, jobs, households & business) Also March 2: payroll tax deferral March 17: $500 million in loans to support workers; extend payroll tax deferral March 25: $24.7 million support for vulnerable April 6: $17.5 million to help health workers self-isolate April 8: $5.5 million domestic violence April 12: $17 million relief package (including free community kindergarten) April 14: $28 million for community based health service groups April 18: Government offers $200 million for national support package for Virgin Airlines April 23: $4.5 million for Legacy & Lifeline April 24: $2.3 million port businesses in far north April 24: $12 million resilient infrastructure April 25: $54.5 million transport operators package April 28: $33.8 million waived in land rent for farmers, tourism &clubs for six months May 5: The $1 billion Pacific Motorway upgrade from Varsity Lakes to Tugun has been fast-tracked to bust

congestion and create jobs to help in the recovery from COVID-19. May 7: businesses employing Queenslanders will not pay payroll tax on the Federal Government’s JobKeeper

payments. May 11: An additional $500 million in funding secured for interest free loans for COVID19-affected businesses,

doubling the initial commitment. May 18: Resources Community Infrastructure Fund to deliver $100 million over three years towards projects to

improve economic and social infrastructure in Queensland’s resources communities. May 19: Unite and Recover strategy includes $400 million roads package, $200 million council works program’

$100 million small business package May 19: an extra $50 million to help support tourism businesses, theme and animal parks. June 3: council allocations from the $200 million COVID Works for Queensland program June 16: An additional $23 million to support the state’s taxi and limousine operators. An additional $8.9 million

into national park infrastructure upgrades

South Australia March 11: $350 million package including bringing forward infrastructure projects March 26: Second package $650 million Jobs Rescue Package Also March 16: $50 million for local jobs March 19: $12 million skills package March 29: Fast tracking infrastructure April 3: Fee relief tourism businesses; Defer licence fees for minerals & petroleum sector April 4: $16 million for training providers April 5: $1.6 million for vulnerable April 9: $190 million funded from Jobs Rescue Package ($10,000 grants for small business) April 10: $5.2 million for taxi industry April 15: $6 million for sporting clubs sporting facilities April 21: $13.8 million for international education sector April 23: Almost 500 schools and preschools will receive grants to undertake priority maintenance work, as part of

a $32 million State Government economic stimulus package April 24: $50 million in land tax relief April 29: $3.35 million in grants for community organisations April 30: $2.4 million for domestic violence

June 18, 2020 13


May 1: $1.8 million for bushfire affected businesses May 15: The first round of the $400,000 Wildlife Recovery Fund open for applicants May 19: new $500,000 eCommerce Accelerator Program (eCAP) May 21: Public housing work: almost $6 million in works are set to be completed next month, with the remaining

$4 million to be spent early in the new financial year. May 29: $15 million to overhaul audio-video link technology within South Australia’s justice system. June 5: $1.2 million stimulus for South Australian Wine Industry Development Scheme (SAWIDS). June 5: Up to $10 million rent relief for residential tenants who are suffering significant financial hardship as a

result of COVID-19 restrictions June 10: $600,000 domestic violence disclosure scheme

Western Australia March 16: $607 million supports households and small business March 31: $1 billion economic & health relief package (includes $500m health & front line service delivery) Also March 30: $159 million rent relief for small business April 8: $91.2 million police package April 23: $24.5 million construction workforce April 23: $154.5 million tenants, landlords & construction industry April 30: Fast tracking of major projects May 13: $14.4 million package to support tourism industry and jobs ($10.4m for tourism) “On top of McGowan

Government's $1.8 billion stimulus and relief package invested so far in response to COVID-19.” May 20: planning reform package includes 26 key reform items May 22: The McGowan Government will invest $111.6 million in funding to continue critical State Government

programs and projects across regional Western Australia. June 7: New $444 million housing stimulus (Government says $2.3 billion in stimulus and relief measures

invested in response to COVID-19) June 8: $141.7 million in housing refurbishment package. Social Housing Economic Recovery package estimated

to create and support a total of more than 1,700 jobs over two years - 430 in regional WA June 11: Up to $800,000 available to help start-ups and small and medium enterprises (SMEs) from $16.7m New

Industries Fund

Tasmania March 18: $420 million Support & Stimulus package March 26: $565 million Social & Economic Support package Also April 8: Round 2 of emergency grants open April 11: Boosted Digital Ready for Business grants to $400,000 April 16: school levies refunded April 22: $3 million temporary visa holders April 22: freeze on rent increases for residential tenants April 30: additional $10 million to the small business grants program and a further $10 million in hardship grants April 30: waive rego fees for tax operators for !2 months May 2: $1.4 million for family violence May 7: Update on Social and Economic Support Package, which totals around $1 billion. May 15: Premier “tasked Treasury to do an immediate review of the State’s $3.7 billion infrastructure program and

identify projects that can be brought forward and commenced swiftly.” June 4: $144 million for social housing and affordable dwellings. Government estimates that it will build on current

infrastructure package of $1.8 billion over the next two years, and in total will support an estimated construction value of $3.1 billion across the next two years:

https://www.miragenews.com/two-year-blitz-to-generate-31-billion-in-construction-value/

June 18, 2020 14


ACT March 20: $137 million first phase includes rates rebate and commercial rates relief April 2: $214 million second phase of $351 million Economic Survival package April 22: Fast tracked projects April 30: More fast tracked projects. Total $25 million to date May 20: Levy reduction for commercial property owners June 4: stamp duty for eventual owner-occupiers on the purchase of: New land single residential blocks to zero;

off-the-plan apartment and townhouse* purchases up to $500,000 to zero; Off-the-plan apartment and townhouse* purchases between $500,000 and $750,000 by $11,400

June 11: $10m extension of fast track infrastructure program June 15: A range of government fees and charges such as parking, business registration and development

application fees will not increase in the 2020-21 financial year, recognising the pressures facing our community as we recover from the COVID-19 pandemic. Some fees and charges will be frozen at current 2019-20 levels, such as: Birth, death and marriage registrations fees Building fees Domestic animal fees Emergencies fees Land title fees Planning and development fees Public health fees Security industry fees Vehicle registration fees

On June 18, the Government will be providing an economic update to the Legislative Assembly.

Northern Territory March 18: $60 million economic stimulus package includes home & business improvement March 24: $65 million (includes $50 million Small Business Survival plan) as part of Jobs, Rescue & Recovery

plan April 8: $180 million Business Relief for Payroll, Power, Rent and Rates April 16: second stage of Small Business survival plan (includes $20m for operational costs) April 16: $30m home improvement plan doubled (NT Government says now investing $300 million to protect the

economy and save jobs) April 20: tax relief for hospitality industry and clubs April 30: timetable to ease restrictions May 6: one-off grants of up to $10,000 to NT childcare operators May 9: $2 million support for aviation sector May 17: $2 Million Immediate Tourism Resilience Plan (grants totalling $500,000 provided) May 18: $1.3 million Sport and Active Recreation Sector Immediate Response and Resilience Package. Round 2

grants open May 18: $2 million for Fred’s Pass Sport and Recreation Reserve June 11: $5.2 million Tourism Voucher Scheme

What is the size of the stimulus? The estimated size of all the measures announced to date has been estimated near $295 billion. The estimate will need to be reviewed to ensure all the announcements represent ‘new’ money and weren’t covered in prior releases. Some of the measures are not costed. The list may not be exhaustive.

covid-19: stimulus and re-opening of the economy · 2021. 1. 24. · june 18, 2020 2 economic...

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