Update on Australian Government Response to COVID-19

FEDERAL GOVERNMENT TO CONSIDER PANDEMIC LEAVE

As the Federal Government moves to fight a major outbreak of coronavirus in Victorian aged care homes, the Prime Minister has confirmed  that he is discussing with the Minister for Industrial Relations the prospect of introducing pandemic leave. Scott Morrison said there were ongoing discussions between government, employer groups and employees about a range of issues around managing the pandemic, including leave provision. The Victorian Government has cited the incidence of infected people going to work as a factor in the spread of the virus.

HISTORIC LEVEL OF DEFLATION

Australia has recorded a rare bout of price deflation, with the Consumer Price Index falling 1.9 per cent in the June quarter - the largest quarterly fall in the CPI in 72 years. The Australian Bureau of Statistics attributed the inflation plunge to free child care introduced on a temporary basis during the COVID-19 response and a 19.3 per cent drop in the price of automotive fuel. For the 2019-20 year, Australia’s annual rate of inflation was -0.3 per cent - only the third occurrence of negative annual inflation since 1949, after 1962 and 1997-98.

SUPERANNUATION FUND MEMBERS RUSH FOR CASH

More than one million people have applied to withdraw superannuation over the first two weeks of the second tranche of the early-release superannuation scheme, the Australian Prudential Regulation Authority  has revealed. In total, fund members had lodged 3.9 million applications over the new and previous financial years, seeking to withdraw $29 billion in superannuation. On current application rates, it is likely that the amount withdrawn under the early-release scheme will far exceed $40 billion, as fund members seek to replenish their cash reserves. In addition, the Federal Government has extended the deadline for applications, from September 24 until December 31, 2020.

JOBS DIVE IN COVID-19 RESURGENCE

Victoria has suffered Australia’s biggest job losses since the COVID-19 outbreak escalated in mid-March, the Australian Bureau of Statistics  has reported.  Total payroll jobs decreased by 1.1 per cent in Australia between mid-June and mid-July, with Victorian jobs decreasing 2.2 per cent as restrictions were re-introduced. Victoria has lost 7.3 per cent of jobs since mid-March and NSW 5.3 per cent, while Western Australia was the least affected, losing 3.1 per cent of jobs. In Victoria, the accommodation and food services sector lost almost 25 per cent of jobs.

IRON ORE DRIVES EXPORT GROWTH

While the domestic economy struggles to emerge from the COVID-19 induced recession, Australia’s exports have forged ahead. Trade figures for June from the Australian Bureau of Statistics show that the value of exports increased by $2.35 billion, or eight per cent, driven by strong exports of iron ore. In June, exports of iron ore increased by eight per cent to $9.92 billion, the highest export value on record. Total exports for iron ore in 2019-20 exceeded $100 billion, representing more than one-quarter of Australia’s total goods exported for the period. China accounted for 87 per cent of all iron ore exported in 2019-20. Imports of petroleum rose 29 per cent, while apparel imports rebounded by 65 per cent to $843 million. Electrical machinery and appliances jumped 19 per cent in the month to a record high of $1.69 billion.