On Sunday 22 March the Prime Minister, Scott Morrison, and Treasurer, Josh Frydenberg, announced a package of measures as part of their Economic Response to the Coronavirus (ERC). That response included a new Coronavirus Supplement to the Jobseeker Payment (formerly Newstart) to be paid at $550 per fortnight. This is a significant and unprecedented increase in Newstart, and it is true that it virtually doubles the basic rate of payment. However, things are more complicated when we look at the different family types.
New research from The Australia Institute shows that Australia’s private health insurers are set to enjoy a windfall of between $3.5 billion and $5.5 billion over the next six months.
“The takeover of private hospitals by Governments, social distancing and other policies to counter corona virus mean that far fewer services will be provided to private health insurance policy holders,” said Roy Harvey, report author and health finance expert.
E&OE TRANSCRIPT -- PRESS CONFERENCE
1.45pm SUNDAY, 22 MARCH 2020
MURAL HALL, PARLIAMENT HOUSE
Response to Second Stimulus Package
Dr Richard Denniss, Chief Economist, The Australia Institute
Matt Grudnoff, Senior Economist, The Australia Institute
Dr Richard Denniss: The Australia Institute welcomes the announcement by the prime minister and treasurer today of the second round of stimulus to cope with the enormous and unprecedented economic consequences of coronavirus.
The Government’s second economic stimulus package in response to the Coronavirus is a package of positive small short-term measures but provides no long-term secondary benefit.
However, better measures will also need to be put in place to ensure the stimulus gets out more quickly. Furthermore, there is a real risk effected employees will not receive the benefits going directly to business.
“The Government's aim is 'targeted, temporary and scalable' where they should be 'structural, sustainable and scalable,” said Dr. Richard Denniss, chief economist at the Australia Institute.
New research from The Australia Institute has found that a majority of Australians (52%) want to see Newstart boosted to the rate of the Age Pension for the course of the Coronavirus crisis, while one in three Australians (34%) oppose the idea.
- The maximum single rate of Newstart is currently $559 per fortnight, which is $291 less than the maximum single rate of the Age Pension of $850.40.
“Looking at the Government’s coronavirus stimulus announcement, one thing stands out: the size is right for the initial response but the shape is wrong. The most effective form of stimulus makes up less than a quarter of the total package,” said Matt Grudnoff, Senior Economist at the Australia Institute, responding to the Morrison government's stimulus package details.
“The Prime Minister asserted $3 in every $4 dollars of stimulus would go to business -- it should be other way round. Common-sense and recent history tells us that business don’t spend when their sales are falling.
by Richard Denniss
[Originally published in the Australian Financial Review, 02 March 2020]
In the summer of 2010, devastating floods hit Queensland killing 33 people, causing billions of dollars in damage, shutting coal mines, and knocking an estimated $30 billion off GDP. The then Labor Government’s promise of a budget surplus was washed away too.
by Ebony Bennett
[Originally published in the Canberra Times, 07 March 2020]
It might be time to panic. Not about running out of toilet paper, the real danger is that the Morrison government will undercook its mooted fiscal stimulus package and risk sending Australia into recession to prove an ideological point.
New research by the Australia Institute shows the Government’s objective of achieving a budget surplus ignores the consequences of such an economic strategy—leaving Australian taxpayers to bear the burden of less government services, despite paying their taxes.
The report reveals that the present Government commitment to return to a surplus of at least one per cent of GDP can actually be seen as a commitment to tax the average taxpayer $1,700 more than is necessary to match the value of government services.