The OECD says the Australian economy could suffer more if there's a second wave of coronavirus. Image by Dan Himbrechts/AAP PHOTOS

epidemic and plague

PM warns of cost from second virus wave

2020-06-11 15:22:55

Prime Minister Scott Morrison is using the enormous economic cost of a second wave of coronavirus to urge protesters not to hold another series of anti-racism rallies.

The Organisation for Economic Cooperation and Development predicts Australia’s economic output could contract by 6.3 per cent this year if there’s another wave of COVID-19.

“That’s a $25 billion cost to the Australian economy,” Mr Morrison told 3AW radio on Thursday, noting the OECD expects economic growth to decline by five per cent if the virus remains contained.

“People wanting to take (protests) further this weekend are showing a great disrespect to their fellow Australian.”

One protester at last weekend’s Melbourne rally has tested positive for the coronavirus. He developed symptoms 24 hours after marching.

It could be another week before authorities know whether other protesters have caught the virus from him.

Treasurer Josh Frydenberg said the OECD’s latest economic outlook paints a pretty grim picture for the global economy, which it expects will contract by six per cent this year.

That compares with a fall of just 0.1 per cent during the 2008-2009 global financial crisis.

“The positive news for Australia out of this OECD report was that the economy here … performed very well compared to other nations around the world,” Mr Frydenberg told parliament.

He earlier told reporters it is critically important that Australia maintains the momentum of easing restrictions, including the removal of closed domestic borders.

“Closed borders cost jobs,” the treasurer said.

The OECD says the federal government should consider what economic support might be needed once existing measures end in September.

It suggests strengthening the social safety net and investing in social housing.

The government’s JobKeeper and pumped up JobSeeker schemes are due to end in September while loan repayment holidays introduced by the major banks will also cease.

Labor leader Anthony Albanese agreed there needs to be a transition plan, rather than relying on the government’s prediction of an economic “snapback”.

“Snapback runs the risk of really restricting the growth in the economy and having a severe impact,” he told reporters.

Welfare advocate ACOSS chief executive Cassandra Golidie said the JobSeeker payment, which was doubled to $1500 per fortnight during the crisis, should not return to the “brutality” of people trying to survive on $40 a day.

“We must fix the social security payment arrangements so that we are protecting people from poverty, otherwise this reality will be devastating and grizzly,” she told ABC television.

The head of Australia’s corporate watchdog has warned some businesses could still go under when the economy hits the so-called financial cliff in September.

Some people could also lose their homes as the first recession in nearly 30 years takes its toll.

Australian Securities and Investment Commission chairman James Shipton says while the financial system is preparing for any eventuality as the country works through the coronavirus pandemic, there will be fallout.

“The reality is that some Australians are going to be caught on the wrong side of this,” Mr Shipton told ABC radio.

“Economic recessions, economic troubles have consequences and that is a sad reality, a tragic reality.”