The Morrison government is moving to harden Australia’s borders, with the prime minister declaring a new travel ban will be placed on all non-residents and non-citizens coming to Australia, effective from 9pm on Friday.
The treasurer, Josh Frydenberg, signalled on Thursday the looming travel ban, which will decimate Australia’s struggling tourism sector, could remain in place for six months, or longer. Frydenberg told the ABC the restrictions would “last as long as the medical experts tell us that we need to prevent the spread of the virus”.
Confirmation that Australia would isolate itself from overseas visitors, potentially for months, came shortly after the Reserve Bank of Australia cut the official cash rate to a record low of 0.25%. Australia’s central bank joined with the Morrison government on Thursday to pump more than $100bn into the financial system in an effort to keep struggling businesses afloat and stave off substantial job losses.
The RBA governor, Philip Lowe, declared “extraordinary” times warranted significant intervention, including an unprecedented quantitative easing program of buying government bonds.
Lowe said the central bank was expecting “a major hit to economic activity and incomes in Australia that will last for a number of months” and said the official cash rate would remain at emergency levels for “some years”.
The governor warned Australians that job losses would be “significant” as a consequence of the economic shock created by the coronavirus pandemic. “I think we have to steel ourselves for a rise in the unemployment rate,” Lowe said. “I’m hoping it’s a fairly temporary event.”
Frydenberg said the health measures needed to contain the spread of the virus meant unemployment would rise, and rise “substantially”. He declared a recession would be hard to avoid. “This is a massive hit to the Australian economy.”
Speaking to reporters in Canberra, Scott Morrison pointed to the government’s looming second stimulus package expected to be unveiled shortly. The prime minister said round two would contain income support for workers, and confirmed he was speaking to banks to ensure they didn’t foreclose on people’s mortgages.
The prime minister said the government was considering a number of options to craft a safety net for businesses bearing the brunt of the disruptions. “When we say we want to cushion the blow, we’re looking at … issues around income support.”
The prime minister hinted the enhanced income support measures the government was developing would also apply to current recipients of Newstart. He said the government recognised that people on support payments would face significant difficulty getting work during a downturn. “We understand over the next six months that is a certainly very different economy. When circumstances change, you need to adjust your packages to reflect that.”
Addressing the looming travel ban, Morrison said it was “essential” to close the border to foreigners by Friday night because of the way the virus was currently spreading in the community.
Queensland on Thursday recorded 50 new cases of the coronavirus in 24 hours, the biggest single day increase. New South Wales added another 40.
“The reason for [the travel ban] is about 80% of the cases we have in Australia are either the result of someone who has contracted the virus overseas or someone who has had a direct contact with someone who has returned from overseas,” Morrison said. “The overwhelming proportion of cases in Australia have been imported.”
The travel ban contains exemptions for Australian citizens, permanent residents and their immediate family, including spouses, legal guardians and dependants. New Zealand citizens who live in Australia as Australian residents will also be exempt, as will New Zealanders transiting to New Zealand. The government says exemptions for Pacific Islanders transiting to their home countries will continue to apply.
The government is in discussions with airlines about continuing some international flights for the purpose of bringing Australians back from overseas, and for continuing the movement of goods and freight.
The RBA on Thursday committed to providing a three-year funding facility worth at least $90bn – a measure that will allow banks to lend to small business through the economic downturn. The government unveiled a synchronised measure allocating another $15bn so small banks and credit unions can supply low-cost loans to consumers and small business.
Morrison described the unprecedented intervention as “a very significant injection to support Australians, to support our economy, to support business, to support jobs, as we all go across on this bridge together to the other side, where on the other side we know that the Australian economy will be stronger, Australians will be healthier and Australian life can return to what we knew it to be.”
Frydenberg said the intervention had a simple purpose: “To decrease the cost of credit and to increase its flow.”
The difficult conditions triggered by the pandemic were underscored early on Thursday when Australia’s national carrier Qantas said it would stand down two-thirds of its 30,000-strong workforce without pay and end international flights – a decision that came despite a $715m rescue package for the Australian airline sector, unveiled by the Morrison government on Wednesday.
The government also implemented new restrictions on the sale of medicines in an effort to head off hoarding and panic buying in pharmacies.