Coronavirus

Coronavirus restrictions to cut $50 billion from Australia's economy, Josh Frydenberg says

Treasurer Josh Frydenberg makes a ministerial statement to the House of Representatives at Parliament House in Canberra, Tuesday, May 12, 2020. Source: AAP

Treasurer Josh Frydenberg was delivering a sobering economic update when he was forced to stop due to a coughing fit.

Treasurer Josh Frydenberg says Australia's coronavirus restrictions have wiped the equivalent of $50 billion from the nation's economy.

In a socially distanced parliament on Tuesday, Mr Frydenberg struggled to suppress a coughing fit as he discussed the sobering data revealing the economic effects of the coronavirus.

He confirmed Treasury's forecast that the economy will shrink by $50 billion, or 10 per cent, in the June quarter amid the coronavirus restrictions that have shut down swathes of businesses.

The loss is equivalent to the total quarterly production of South Australia, Tasmania, the Northern Territory and the ACT.

The departmental figures are in line with the Reserve Bank's forecasts released on Friday.

While the full budget has been delayed until October, Treasury will deliver an updated fiscal outlook in June.

Mr Frydenberg outlined the boost to jobs and GDP expected during the three-stage relaxing of restrictions between now and July.

Once the third stage is reached, the economy should be $9.4 billion a month better off and 850,000 Australians should be back in work.

That includes people who have been stood down and are receiving the JobKeeper wage subsidy, who aren't counted among official unemployment numbers.

Labour force figures out on Thursday are expected to show a million more people out of work now than in February.

Mr Frydenberg warned any improvements depended on Australians continuing to follow health advice.

"Failing to do so could see restrictions re-imposed at a loss of more than $4 billion a week to the economy," he said.

"This is the economic cost we all have to bear if we fail to act."

Prime Minister Scott Morrison is under pressure from some within his party to end the expensive JobKeeper wage subsidy earlier than the planned six months.

Labor says a lower than expected take-up means it should be expanded to cover short-term casuals and others who missed out.

"The answer is not spending more or spending forever," Mr Morrison told coalition colleagues on Tuesday.

Labor treasury spokesman Jim Chalmers.
Labor treasury spokesman Jim Chalmers.
AAP

Labor's treasury spokesman Jim Chalmers said it was clear coronavirus was a "diabolical pandemic with devastating economic consequences".

"Yet all we got today is a cut and paste of what the government has already said and what Australians already knew," he told parliament.

"If only the treasurer had coughed up some detail or a plan."

People in Australia must stay at least 1.5 metres away from others. Check your state’s restrictions on gathering limits. Testing for coronavirus is now widely available across Australia.

If you are experiencing cold or flu symptoms, arrange a test by calling your doctor or contact the Coronavirus Health Information Hotline on 1800 020 080. The federal government's coronavirus tracing app COVIDSafe is available for download from your phone's app store.

SBS is committed to informing Australia’s diverse communities about the latest COVID-19 developments. News and information is available in 63 languages at sbs.com.au/coronavirus.

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