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The Hon Scott Morrison MP

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Prime Minister Morrison: Good morning, everyone. Jobs; Australians in jobs—this is something our government has had, and continues to have, a vibrant passion for. More than 1½ million jobs have been created over the last six years or so since we first came to government. Our policies are designed to get people in jobs, to get young people into jobs, people as they move through the years, and they go even into the older years, getting them into jobs, as careers change and transition. Jobs provide people with choice. Jobs are just so important. And as we confront the challenges of the coronavirus, as its impact is felt, not just here in Australia but around the world, jobs are so important as part of our plan to ensure Australia moves through these difficult months ahead. Yesterday I was here with the health minister and we announced and outlined our plans to deal with the health challenges associated with dealing with the coronavirus—some $2.4 billion, in a series of well thought through measures dealing with everything from the needs of remote Indigenous communities to the pop-up clinics and the testing procedures and facilities that were available. It is a health crisis, but it's a health crisis with very significant economic impacts. We set this out very clearly two weeks ago, when as a government I stood here in this courtyard and said we were preparing for a pandemic. Today the World Health Organization has made that declaration. We called that two weeks ago. Back in January we also called the coronavirus an issue that warranted and needed our very careful attention. And ever since that time we have been preparing and responding with the travel bans and the other actions that the government has taken.
But the fiscal stimulus that would be necessary, and is necessary, to deal with the economic challenges that the country will face in the months ahead has been an important part of our plan for Australia to move through the challenges of the coronavirus in the months ahead. This plan is about keeping Australians in jobs. This plan is about keeping a business in business, particularly small- and medium-sized businesses. And this plan is about ensuring the Australian economy bounces back stronger on the other side of it and, with that, the budget bounces back with it.
Today we're announcing a series of measures. Those measures are designed to achieve those outcomes. They are heavily focused on understanding that it is businesses that keep people in jobs. And those businesses will confront challenges when it comes to cash flow and demand impacts, particularly in the short term, that need to be addressed by this package.
I'm going to ask the Treasurer to go through the specific measures, but I say that simply that this package over the course of the budget and the forward estimates will inject some $17.629 billion into the Australian economy in a series of measures which are designed to support cash flow, boost investment and provide immediate demand stimulus to the Australian economy. More specifically, both this financial year and in the next two financial years, the gross impact of that stimulus is $22.9 billion—that's 1.2 per cent of GDP. This is a significant investment. We have taken the decision to put this stimulus in place. That has the obvious impact on the budget outcome for 2019-20, and Australians understand that. Australians know that this needs to be the priority, and our government agrees with that priority. And that's why we've taken the decision to put these measures in place.
The measures deal with supercharging the instant asset write-off; backing business investment with an accelerated depreciation scheme, which the Treasurer will work through; a cash flow boost for employers—this is small- and medium-sized employers and making sure that they can get grants for up to $25,000, and that will support some 690,000 businesses across Australia—wage assistance for apprentices and trainees. One hundred and seventeen thousand apprentices who are out there on the tools today will be getting the support of that payment to their employers to keep them in their apprenticeship. That support will run over a period of nine months. Households will receive a stimulus payment of $750 right across the full gambit of those who receive all sorts of benefit payments. The biggest beneficiaries of that will be pensioners, and they comprise around half of those who will receive those payments. But they also will be extended to those in family tax benefits, which obviously goes to those in earning households.
And there will be a coronavirus regional and community fund. There are businesses across this country that will be more impacted than most and there will be regions and communities across this country that will be more impacted than others. Those in particular in more remote areas. Those who are particularly exposed when it comes to the external sector of our economy—the tourism sector, the travel sector, parts of our export sector, in cray fishing in places where that is a predominant activity and there is a significant exposure. We'll be establishing a $1 billion fund, which will be led by the Minister for Trade, Tourism and Investment, Minister Birmingham. And that will include things like waiving marine park fees and national park fees at Kakadu and other places. But these will be targeted measures, and I'll be looking forward to discussing that fund with the premiers and chief ministers when we meet together tomorrow.
Everyone has a role to play here to get us through this. I particularly want to acknowledge the way big business have responded over the course of this week. You've heard me refer to what Qantas has done and what the banks did to pass through the rate cut. Yesterday I was advised that Telstra are also going to be supporting their casual employees, should they be in a position where they're affected by coronavirus or self-isolation.
I also want to provide this assurance to Australians: already under our welfare system, a casual employee who would be impacted by the coronavirus and for medical reasons who would need to self-isolate or indeed contracted the coronavirus and would not be able to work, they can access what is currently called the sickness payment. That payment is going through a change of name, but it's the same payment. And what we'll be doing is waiving the waiting period for people to access what is currently called the sickness payment. It will be called the jobseeker payment, but it is a Newstart level payment. And people who are casual employees that wouldn't be able to go to work or because they have to self-isolate or indeed have the virus, they would be able to access that payment. The normal assets test rules apply to those, as they do to these payments, but the waiting period will be waived to enable them to access that payment. And that will provide that support. Many other countries don't have that in their system. I note that the UK has made some announcements on that. We already have a system that deals with that, and we're going to make sure that that payment is more readily able to be supported.
The Treasurer and I have also indicated today that there have been changes to the deeming rates. That is not technically part of the stimulus package. That is a response to the early decision by the Reserve Bank. But that will also, I think, come at a welcome time for the arrangements we've put in place today.
So it is a comprehensive package. It's one that we believe is well-targeted. Importantly, these measures do not extend beyond 30 June next year. And that means that gives the budget and the economy the opportunity on the other side to ensure that we can bounce back strongly. How long will the virus run for? Well, that is a matter that scientists and health professionals are advising us on. But it does have a finite life. There is another side to going through this issue, and it will be stronger on the other side, and the global economy will recover on the other side. And the Treasurer and I and the government want to be in the best possible position for our businesses—holding onto their employees, ensuring they're continuing to train up, ensuring that they're maintaining their investment plans—because on the other side they're going to do well. And we're going to do everything we can to ensure they're best positioned to bounce back strongly on the other side. Thanks, Josh.
Mr Frydenberg: Thank you, Prime Minister. This is a substantial package in response to a significant economic challenge. The package is designed to support confidence, to encourage investment and to keep Australians in a job. The package is worth $17.6 billion, $11 billion of which will go out the door before 30 June. And, as the Prime Minister said, this is on top of the recent health package, which we announced of $2.4 billion in measures. Importantly, $3 out of every $4 spent will go to backing business and keeping Australians in a job—$3 out of $4 being spent is going to backing business in keeping Australians in jobs. There are six key measures. Each measure is temporary, each measure is targeted and each measure is proportionate to the challenge that we face. There are two measures that are directly supporting investment. Both measures apply from today and to 99 per cent of Australian businesses—namely, those with a turnover of up to $500 million. The first is an increase in the instant asset write-off from $30,000 to $150,000. Any such purchase from now until 30 June, including a truck, a tractor, a shop fit-out, can be written off immediately. The second is a 50 per cent accelerated depreciation deduction over and above what businesses can already deduct in the first year and is available for 15 months to 30 June 2021.
These two measures cost $3.9 billion over the forward estimates and are designed to keep Australian businesses investing, as well as rewarding them for investing more. We want to keep Australian businesses investing and we want to reward Australian businesses for investing even more.
There are two measures that are designed to boost cash flow to small- and medium-sized employers. The first is a payment of up to $25,000 to businesses that employ people and have a turnover of up to $50 million. The payment will be delivered automatically through the tax system, so no new forms will be required. And these payments are tax free. So they'll be delivered automatically, and these payments are tax free. The second is a 50 percent wage subsidy for apprentices and trainees in businesses with less than 20 employees. Employers will receive up to $21,000 per apprentice, and 117,000 apprentices will have additional job security as a consequence of this measure. These two measures, which cost around $8 billion, are designed to keep businesses in business and Australians in a job.
The government will also deliver a one-off stimulus payment to households, with 6½ million Australians receiving a payment of $750. This includes recipients on Newstart, the disability support pension, carers allowance, youth allowance, veteran support payments, family tax benefits, the Commonwealth senior health card holders and 2.4 million age pensioners. This one-off payment, which costs $4.8 billion, will flow automatically from 31 March and provide additional income to millions of Australians. That will be spent across the economy.
A new regional and community support fund is also being established, with an initial allocation of $1 billion, and this will be designed to target those areas, and provide assistance, that are most heavily affected by the spread of the coronavirus. This will include the waiver of certain fees and charges for tourism businesses operating in Commonwealth national parks and the Great Barrier Reef Marine Park, increasing domestic tourism promotion and additional assistance through Austrade to help identify alternative export markets and address supply chain breakdowns. As occurred with the bushfires, the ATO will also be providing relief for those significantly affected, with the deferral of various tax obligations by up to four months.
As the Prime Minister foreshadowed, in addition to the stimulus package, the government is lowering the deeming rates at a cost of $600 million to reflect the recent changes in interest rates. Both the lower and the upper deeming rates will be reduced by half a percentage point, benefiting around 900,000 Australians, including 560,000 age pensioners.
These are challenging times, but the Australian people and the Australian economy are up to this challenge. Our economy has continued to grow and our economy remains resilient. The genesis of this economic shock was outside of our control, but our response is not. And our disciplined and careful budget and economic management over the last 6½ years has put us in a position where we now have the fiscal flexibility, we now have the financial firepower, to respond to this economic shock. This package of measures is both substantial and considered, and it ensures that Australia stays ahead of this global challenge as it does continue to unfold.
Prime Minister Morrison: Thank you, Josh. Kieran.
Journalist: Will this package be enough to save the nation from recession?
Prime Minister Morrison: We have worked carefully, Kieran, to make sure that we've got a proportionate response here to meet the challenge. Now this is, as I said, 1.2 per cent of GDP. To give you some comparison: when the initial stimulus was done for the GFC many years ago, those payments equated to some 0.88 per cent of GDP in that first package, which, as you know, was supported by the coalition. And that used quite similar measures in that first stimulus. It was payments through the payment system. That was 0.88 per cent of GDP. The difference with this package is (a) about $3 out of $4 of what's going into this is actually going into business cash flow. It's going into keeping people in work. It's going into ensuring that investment continues to be made in the economy with purchasing of new equipment and the wheels of the economy turning. This is, I think, a key difference—we understand that, for the Australian economy to continue to move forward, businesses need to continue to go forward and do what they do each day. But that also requires the support of a demand stimulus as well that is effectively and very efficiently delivered. And that's what the $4.6 billion payment is doing—sorry, $4.7 billion payment is doing. And it's going through to those people, which we know from past experience, are most likely to churn that into the economy quite quickly. So, as Josh said, we can't control the source of this problem—being the coronavirus, which has come from elsewhere—but we can control our response. This response, as I've said, as a key principle is also scalable. The budget will be in two months time. We believe these measures are the measures that can do the job, and we will continue to monitor events as we go forward. But we got ahead of this early. We've worked very hard to stay ahead, and that challenge grows each and every day. And I think Australians are really starting to come to terms with what the economic implications of this are. I believe very strongly that they will support our decision to actually make this stimulus the priority at this time for the Australian economy, because it's about their jobs, their livelihoods and it's also about their future, because on the other side of this, we will bounce back stronger. Mark.
Journalist: Prime Minister, the budget now is obviously back in the red. What's your promise on a surplus? When will Australia see one?
Prime Minister Morrison: Well, we'll update the budget when it's handed down in a couple of months time—
Journalists interjecting—
Prime Minister Morrison: Hang on. I'm going to answer Mark's question. The budget is obviously updated in May, Mark. And what we need to look carefully at over the next few years is how the broader global impacts will impact on the Australian economy out over the next three or four years. But, importantly, these measures are designed to ensure that, at the end of this next financial year, then there is actually a positive impact that comes from the bringing forward of expenditure on accelerated depreciation. So we have positive impacts on the budget in 2022-23 of $1.6 billion based on this and $3.7 in 2023-24. The way we have designed this stimulus is to ensure that it doesn't have a fiscal hangover down the track, that it doesn't bury the budget for a decade. This is all designed to put the stimulus in now in a very efficient and effective way to deal with the problems that are here and now, and I've got to say problems that we know to be the issue here in Australia. We're not looking to cut and paste from people's problems in other economies. This is based on our diagnosis of what is happening in the Australian economy and the best way to deal with it. Lanai.
Journalist: Prime Minister, given the level of panic around coronavirus, how can you ensure that people will actually spend their $750 rather than just banking it?
Prime Minister Morrison: I believe that their common sense is demonstrated in the wake and in response to previous situations like this sort of speaks for itself. I mean the advice that we have on this has been proven by these experiences in the past. I think what's important is Australians go about their business, is that they know—and they can see through what we've announced today—that this is a very comprehensive, a very well thought through, a well-targeted plan which is designed to support the Australian economy and jobs and businesses through the difficult months ahead. And in addition the health plan that we've announced and the support we're providing to the states so people can go about their lives in response to the coronavirus can give them that confidence. This is a very clear plan to see us through. And the plan is based on Australians also working together. We all have a role to play, whether it's the Commonwealth government. I'm looking forward to discussing these measures with the states tomorrow and looking forward to their responses as to what they would do in addition to this. With this information, they can now add to this with their own plans. But the health side of this is also critically important. The health plan, working together with the economic plan, I think can give Australians the confidence they're seeking. Phil.
Journalist: The payments to the welfare top-ups are going out at the start of the June quarter. Is that a recognition that the March quarter is cooked or that the June quarter is what the focus is on now? And could you just explain how the $17.6 billion becomes 20, 22 or whatever it was?
Prime Minister Morrison: Yes, sure. Josh, you could do that as well. I mean it's $22.9 billion for 2019-20, 2020-21 and 2021-22. Now that includes some $9.2 billion in fiscal impacts of the instant asset write-off and the Backing Business Investment measures. And when you bring forward investment, if you're writing that investment off a lot quicker, then obviously you can't be making depreciation deductions for the same investment three years from now. And so we're bringing forward the benefit of those depreciation, those tax measures, to businesses now. That means down the track when the economy is improving, then we can expect to see some improvement. And that's the difference between the two. It's the timing issue of the impact of the depreciation and the instant asset write-off measures. But, Josh, did you want to have a go?
Mr Frydenberg: Prime Minister, I mean the money will start to flow to these households from 31 March—$750 going to 6½million Australians: Australians who are on Newstart, Australians who are on the carers allowance, Australians who are getting family tax benefit—
Prime Minister Morrison: Commonwealth seniors health card too.
Mr Frydenberg: Commonwealth senior health card holders. Six and a half million Australians will be getting a cheque for $750. Now it's not for us to tell those Australians how to spend their money, but what we do know from experience is that they will spend that money and that money will encourage economic activity. And the more economic activity that we see through the June quarter in particular will be important, because in the June quarter, just as we've seen in the March quarter, the spread of the coronavirus has had an impact across the economy. It's disrupted end-to-end supply chains. It's obviously had an impact on the tourism sector, on the international education sector and more broadly.
Prime Minister Morrison: The cash payments have two purposes, and they're both important. Of course, those who receive them, that is obviously a benefit to them. But, more importantly, frankly, it is about a cash injection into the Australian economy, which supports small businesses and supports medium businesses. So the cash payment works together with the cash flow support that we're putting into small businesses and that in turn supports the jobs, which means people can continue to participate positively in the economy and have greater confidence going forward. Katharine?
Journalist: Prime Minister, can you explain a little more about how this fund for tourism and other businesses works?
Prime Minister Morrison: Sure.
Journalist: Do people have to apply for it? Are there particular criteria around what people can apply for or not? I just don't understand how it works.
Prime Minister Morrison: This fund is one that we'll have to work through with the states and territories. I'm not saying that means it's a dollar-for-dollar fund. What I'm saying is that there's a lot of work being done at the moment to identify those areas which are most critically impacted. And, look, this is an unfolding story day by day. We're obviously concerned about the impact in places like North Queensland, for example, and that's why we've made the decisions on things like the marine park fees and things of that nature. What we envisage is that the same type of assistance that you've seen provided in the most affected bushfire areas, and there is a range of grants and other payments that have been paid into those environments, in those circumstances. Then we would look at how those same types of grants and supports could be provided into designated areas that are more affected as a result of this coronavirus.
On top of that, as the Treasurer has said, there are things like domestic tourism promotion—things of that nature—and so far, at least in relation to the bushfires, we've seen some positive results from the investment we did out of the National Bushfire Recovery Fund. So it is a similar type of process that you would see in a disaster recovery arrangement being applied in specific areas that are particularly affected, but that has to be properly defined. I want to work closely with the states and territories on that because there are measures that I'm sure they would be looking at in their more affected areas. It's creating a fund to draw those initiatives out of, particularly working in close consultation with those sectors themselves.
Geraldton—that's where the crayfish are exported to Chinese restaurants in China. It's obviously had a big impact on that town and on that sector. Now, Austrade has already been working with them to try and diversify their markets, to get their product into other places, but they're also impacted by the fact that there are fewer planes going between Australia and China and you need the bellies of the planes to put the crayfish in. That means that we're going to need quite targeted plans, working closely with people on the ground, and this billion-dollar fund is creating the resource to fund those initiatives. It works differently to the others. It has less immediate stimulatory impact, and that's why it is talked about as a community fund. It's about relief, but it is also about recovery.
Journalist: Treasurer, the Reserve Bank Governor had an urgent meeting with central bankers from around the world into the early hours of this morning. Do your concerns around the ineffectiveness of lower interest rates bear much on the size of the stimulus that you're announcing today?
Mr Frydenberg: Well, I think one important aspect of all of this is the alignment between monetary and fiscal policy. That's really important because, as the Prime Minister said, this is a $17.6 billion package, the bulk of which is going out the door before 30 June, and we did welcome the fact that the interest rates were passed on by the banks. I've spoken to Phil Lowe, actually today, and he continues to watch very closely what's happening with debt yields, what's happening with bond yields, what's happening with credit spreads, what's happening with liquidity in global markets. He's made some comments about that, and obviously monetary policy is the remit of the independent Reserve Bank of Australia. But I think it's important to understand that this is very different to the GFC in a number of respects. This is not a financial system problem; this is not a liquidity crisis; this is a health crisis. But one of the other differences is that, with the GFC, there was a lot more room with monetary policy to respond. This time, monetary policy globally is pretty much exhausted, and we did see the Bank of England substantially reduce their rates down to, I think, a quarter of a per cent overnight. So it's a different situation, but there is an alignment between this government and the Reserve Bank about getting money out the door to support jobs and growth.
Prime Minister Morrison: David.
Journalist: Prime Minister, you said you believe this will do the job. Is the job to avoid a recession? And is the advice of Treasury that this is enough to avoid a recession?
Prime Minister Morrison: The job is what I outlined when I stood here with the Treasurer just 10 minutes ago, and that is to ensure that we keep Australians in jobs, that we keep businesses in business, and that we ensure that the Australian economy is a position to bounce back strongly on the other side. That is the task. That's what we've designed this package to do. If more is required, more will be done, and we'll watch that closely, like you do with any plan. You get the best information and you continue to make good decisions. I think we've made some very good decisions here. This boost—as I said, 1.2 per cent of GDP, particularly in the initial phase. And even stronger than that, actually, this year, as you look at it. There was about $11 billion going out the door, effectively by 30 June. That's when it's needed. This is very front-end loaded. We've done that on purpose because we anticipate that, particularly over the next three months or so, that's when we're really going to see the most significant impacts of the coronavirus. Now, the medical advice may extend that and we will address that in due course.
Take the apprentices' measure, for example. The apprentices' measure is going to support people who are apprentices on 1 March. They will get a backdated payment by having that apprentice in work from 1 January, and that will run out over a nine-month period, which takes us to the end of September. Now, that's a pretty significant period of time. If you're a young apprentice at work today, I think you're going to feel a lot better about that, and, if one of them is one of your kids, you're going to feel a lot better about that. I've got a nephew who works as an apprentice for a plumber down in the shire. Warren, or 'Wazza' as he's known, has a small business. It's a plumbing business. I think it's great that small businesses take on apprentices. And, at a time like this, the best way for me and the government to thank those small and medium sized businesses for those decisions is to back their decision to back these apprentices.
Journalist: Is the Treasury telling you they reckon this will stop a recession?
Mr Frydenberg: David, what we've done throughout this process—the Prime Minister has been very focused on having a considered response, not rushing out a response. We've been working on this for a couple of weeks. And, in that process, we've been working very closely with the Treasury and taking their best advice. Their preliminary estimate is that this $11 billion of injection of funds through to 30 June could add up to 1.5 per cent to GDP in that June quarter. But, of course, the unknown is: how does the virus evolve from here? You heard from the Deputy Governor of the RBA just yesterday, I think, at the conference at the AFR. He said it's too early to be definitive about what the impact is on the June quarter from the evolving impact of the virus. Now, that's also the Treasury's view. But what we have done here is to put a significant amount of money into the economy to support businesses, to support jobs and to support people with those cash payments.
Prime Minister Morrison: Sarah.
Journalist: Can I just clarify: when you say more is required, the government is prepared to spend as much as necessary to avoid Australia falling into recession?
Prime Minister Morrison: The government will always engage in responsible financial and economic management. And, if we believe that is in the interests of the Australian economy, which is why we're investing 1.2 per cent of GDP in this package over the next couple of years, then they're the actions that we'll take. But we will always be measured about it. This package wasn't sort of cobbled together over a weekend in response to events. Two weeks ago, I said that we would need to have a fiscal package, and we've carefully gone about the work, and it has been an exhaustive process over the last couple of weeks. There are plenty of ideas as to how you might do this, but you've got to test them all. The tests that we set for this package were very strong. One of the most important was: not coming up with fancy new schemes that would have to be set up with application forms, where there'd be integrity issues and they'd have the potential to spin off into all sorts of directions. That would have been a very careless action and a reckless action. We knew that the package would need to have a significant volume to it, as you can see here in what we've announced today, but it also needed to be carefully targeted and designed, and we've taken the time to get that right. We will continue to monitor this situation every day. The budget, as I said, is in two months time, and we'll continue to work on these issues and we'll continue to take the responses in the best interests of Australian jobs. I've got to share it around a bit. Kieran.
Journalist: Can you explain how the cashflow payments to businesses that employ workers will help the 1.5 million sole traders, small businesses, that don't employ anyone?
Prime Minister Morrison: We're focused on businesses that actually employ people. We're not making any bones about that. We're supporting some 690,000 businesses that employ Australians. And, as I said, it's about keeping Australians in work. That's what it's about. The $4.7 billion of demand stimulus that's going into the economy is going to be supporting sole trader businesses. That's what it's there for. It's designed to actually improve the cashflow that is going in the economy, and that, of course, supports those sorts of businesses. On top of that, the instant asset write-off is equally applied to those sole traders as well. In addition to that, though, so are the 50 per cent write-off rates that we've put in place for all those businesses. But, as to the cashflow boosts, we're targeting them towards businesses that employ people because our goal is to keep people in work. Shane.
Journalist: On the instant asset right off, you've both mentioned that there's a supply shock to the economy. How will a business get capital equipment out of China, South Korea or Japan, which is where almost all of our capital equipment comes from? Is there a problem there that you might run into where the businesses themselves may not be able to get the capital in to take advantage of the—
Mr Frydenberg: Working through this with the Treasury, obviously there are inventories that are in existence. Car dealers will have cars to be sold today and people will go out and buy them now and write them off directly. The other bit of good news is that we're hearing—from particularly Australian businesses who have got a presence in China—that people are starting to get back to work. That's more outside of Wuhan, of course, but, in talking to some Australian businesses—
Prime Minister Morrison: Including in Wuhan—one of those businesses.
Mr Frydenberg: Yes, exactly. But some Australian businesses with thousands of employees in China are talking about having 95 to 97 per cent of their workers now back into the factories and supply chains starting to pick up. I don't want to understate the significance of the disruption to supply chains, but I also want to point out that there are some positive signs that are coming out now out of China as people get back to work.
Prime Minister Morrison: On the instant asset write-off too, I'd note this. Out of the many things that have happened over the last few months which have been very hard for Australians, one of the things that has been a bright spot in the last couple of weeks has been what we've seen with rainfall in the areas that have needed it too and the fact that people are going to be putting in winter crops. There's a lot of activity that goes into putting in a winter crop, and you've had drought-affected farmers that just wouldn't have been in a position to take on, I think, some of those investments. They're now looking forward at that activity, and I'm looking forward to seeing some of this really supporting those drought-affected communities that finally have a bright spot on the horizon. This comes where they can write up $150,000 per item and get it done, as they're seeking to get these crops in. That means contractors coming and working with them. This is a welcome development for people who, frankly, have been doing it so incredibly hard. It's just so pleasing. They sent me a picture from Quilpie, up at the Tully property where I was, as you'll all remember. It was a dust bowl when I was there and it is now green. They promised me it would be green again. So, to all of those out in rural and regional communities who are looking out on a very different landscape today, we are so pleased for you. John.
Journalist: Prime Minister, the Treasurer's just said that this package, in the June quarter alone, as the Treasury expects, will add about 1.5 per cent of GDP to the economy. So, by admission, that must be about the approximate estimate that the Treasury must think is going to be detracted from growth by the coronavirus?
Mr Frydenberg: Well, John, it's very—
Prime Minister Morrison: That's quite a leap, John. Nice try, though!
Mr Frydenberg: It's unclear, to be honest. It's unclear what the full impact will be in the June quarter from the spread of the coronavirus. This thing is developing quite quickly, obviously. This is obviously a very substantial package. If you look at $11 billion, that's equivalent to just over two per cent of GDP in that quarter.
Journalist: Prime Minister, just on casuals, are you confident that Centrelink is actually going to be able to handle all of those requests if people do get sick? And what is the time frame once people have to go into quarantine or stay home from work? What's the time frame for them actually getting that money from Centrelink on those sickness payments?
Prime Minister Morrison: What we're doing is waiving the waiting period. There's the normal processing time frame, which the Minister for Government Services tells me is about five days in terms of the processing time, and that would apply for someone going onto Newstart or anything like this.
Journalist: Five days?
Prime Minister Morrison: Well, I'm saying it's about a five-day period for processing. You put your application in and it takes about five days, as I'm told by the Minister for Government Services. Now, previously there was a waiting period that you would have to wait out and then make that application. We'll be waiving that waiting period. That will be applied to waive that for Newstart as well, by the way, for those who find themselves in a position of having to access Newstart. This is a good element of our system. There are many other countries in the world that don't have this. I can understand the concern that casual employees would have had. I'm encouraged by the early response from large businesses, and I would hope other large businesses will follow the lead of Telstra. I suspect they will, from some of the messages that I've had. But the government will be doing its bit by supporting that program and waiving the waiting periods to provide that support at the Newstart rate.
Journalist: South Australia has already announced $350 million as a stimulus package. Do you expect this level of investment from all of the states? And it's based on a construction agenda, so are these the kinds of projects you hope all the states will invest in?
Prime Minister Morrison: I'm not surprised at the leadership of Steven Marshall and the South Australian government. He's always been on the front foot on these issues, and I commend him for that. I have no doubt that, when the premiers and chief ministers gather tonight, as we do for our traditional dinner before the COAG meeting, this will be the topic of conversation. I spoke to all the premiers and chief ministers last weekend as we were preparing these packages, and nothing in here is being done on a dollar-for-dollar basis. What we're doing here is fully funded by the Commonwealth, fully administered by the Commonwealth. This is us doing the heavy lifting when it comes to addressing the real tough months ahead, when it comes to the Australian economy and businesses. But I would expect that state governments would be looking at what they can do to complement that. I think that's what businesses and their own citizens in the states would be expecting them to do. So a big shout-out to Steve Marshall for the measures he's already taken. I'd also note that in Queensland, about a week ago, they announced they would have a payroll tax deferral. That's not a payroll tax relief, by the way; you still have to pay the money. What we've done with our measure, which effectively is like a payroll tax type of relief, is provide them with an actual grant. That's tax they won't have to pay. Where we can give greater support to small- and medium-sized businesses, that does two things: it keeps people in jobs and it keeps businesses in business. I'll be looking forward to working with the states. This is a time to work together. Michelle.
Journalist: One of the distinctive features of this crisis is that a whole lot of activities and events are going to be cancelled for health reasons, and we're starting to see that. Do you have any forecasts of how extensive the effect of that could be? And do you have any advice to those looking at whether events should go ahead or should not go ahead?
Prime Minister Morrison: Well, it's very simple: you follow the health advice. I'm going to the footy this weekend and I'm looking forward to it, and I'm sure many Australians would, and I encourage you to, unless you're ill or unless there's reason. If you're in self-isolation for medical reasons or you're actually ill, then I wouldn't suggest you go. But the health advice is not for that to happen at this point.
Journalist: What about the organisers?
Prime Minister Morrison: Well, the organisers should take the health advice of their state health officers, and that is available, certainly at a Commonwealth level. Dr Murphy has been providing advice on those issues. And there have been no suggestions from that body of health advisers for that to occur at this point. Now, we can't know the future and if, at some point in the future, the health advice were to change, then I'm sure they'd give that advice. But, right now, I would continue to say that I think there are 120-odd people who have contracted the coronavirus in Australia and about a fifth of those have already cleared the virus and almost half are close to clearing the virus. Those numbers are low compared to what we're seeing in other countries, but that's not to say it'll stay that way. But, as Dr Murphy has said on numerous occasions, for most Australians who might contract coronavirus, they are likely to have a mild effect from that virus. Those who are more at risk, of course, are the elderly, particularly those who are in aged-care facilities, and potentially those in remote Indigenous communities, and that's why we put in place the health measures that I announced yesterday. I think, Michelle, it's helpful not to speculate until things are known, and at this point the health advice is not advising that. But obviously down the track, depending on how events unfold, that advice might prove event organisers having different plans.
Journalist: Prime Minister, when you declared the budget was back in black, do you believe that maybe you were counting your chickens before they hatched?
Prime Minister Morrison: Well, which of you understood the coronavirus was going to occur when we handed down the budget last year? A quick show of hands. Of course, no-one did.
Journalist: [inaudible] Labor after the GFC?
Prime Minister Morrison: Let's be clear about what happened with Labor's 'four surpluses we announced tonight'. That was in 2012. The GFC had passed. Labor promised four surpluses based on an iron ore price of US$180 a tonne forever. They didn't achieve a surplus because their forecasting and their estimates and the construction of their budget were flawed. What is occurring here is the government has made a clear choice, having brought the budget back to balance, which was demonstrated in the mid-year statement. The mid-year statement showed, even with more conservative forecasts, that we were on track, we were right on track. The coronavirus has had the obvious impact and it has required the decision the government has taken to put in place this significant economic stimulus, and I believe Australians agree with those priorities. We will always do what is right for the Australian economy, what is always right for the Australian people—their health, their wellbeing, their livelihoods—and to ensure that, whatever we face as a country, we will always bounce back stronger. Thank you all very much.