Put world economy into hibernation until crisis over, Josh Frydenberg tells G20
Josh Frydenberg has called for the world’s economy to be put into a controlled hibernation.
A global economic stimulus target will be set by G20 nations in response to the COVID-19 crisis as Josh Frydenberg calls for the world’s economy to be put into a controlled hibernation.
The Treasurer, who took part in a virtual meeting with G20 finance ministers and central bankers on Tuesday night, said the world’s top economies had to urgently endorse a “fiscal support target” for stimulus spending to insulate the global economy.
Mr Frydenberg urged G20 nations to support a collective approach to prevent the collapse of financial systems and head off mass global unemployment, while meeting the basic needs of populations across the world.
As the Morrison government moves on Wednesday to support the flow of domestic exports into key international markets, Mr Frydenberg told his counterparts they must move quickly to unlock global supply chains and trade barriers, especially for the delivery of vital medicines.
“Quick, strong and co-ordinated action now will minimise the permanent human and economic damage,” he said.
“First, our priority should be putting the global economy into controlled hibernation while quarantine measures are in place.”
The Morrison government delivered an unprecedented $130bn scheme on Monday to pay stood-down workers $1500 a fortnight, through their employers, until September.
Australia’s contribution to the global target is expected to exceed the commonwealth’s commitments in fiscal and monetary terms already outlined, which total $320bn — equal to 16.4 per cent of GDP.
Mr Frydenberg said key priorities must be to finance the global health response, maintain financial stability, minimise job losses and keep businesses going.
Australia’s call for urgent action by other G20 nations comes amid concerns some countries are not moving swiftly enough.
Mr Frydenberg said the G20 also “must lead the global recovery” once the health crisis recedes.
“It must co-ordinate the lifting of travel, transport and production restrictions, and commit to fiscal actions that will stimulate a rebound in business activity and get people back to work,” he said.
“Third, we need a robust long-term recovery plan to address new and pre-existing vulnerabilities and inefficiencies.” Mr Frydenberg told the G20 meeting that the free flow of trade must be maintained to ensure the global economy could recover quickly.
“Australia calls on G20 members to unblock global supply chains and limit restrictive trade measures, especially for vital medical supplies,” he said.
“We recommend the G20 action plan outlines options for G20 members to reduce trade barriers, with a priority given to medical equipment.
“Finally, the role of the IMF is critical. I propose the G20 action plan include a directive to the IMF to assess the adequacy of the global financial safety net. If more resources are required, then we need to know soon.”
The government will announce a $170m exporter support package on Wednesday to re-open trade routes for seafood, beef and dairy producers into key Asian markets.
Under a $110m International Freight Assistance Mechanism, the government will help facilitate flights to transport up to $500m worth of products over the next six months.
The package will see up to 40 tonnes of seafood and agricultural products per flight ferried to China, Japan, Hong Kong, Singapore and the United Arab Emirates.
Return flights will bring back medical supplies, medicines and equipment in support of the government’s COVID-19 health response. Australian products including lobsters, crabs, abalone, fresh fish, prawns, Wagyu beef, dairy and table grapes will benefit from the export program, which has been set up under the government’s $1bn coronavirus relief and recovery fund.
Michael Byrne, former head of Toll Holdings and Linfox, will oversee the freight assistance mechanism operating out of four departure hubs: Melbourne, Sydney, Brisbane and Perth.
Trade Minister Simon Birmingham said the COVID-19 pandemic had disrupted supply chains around the world and the new export program would see Australian seafood moved from water to the plate within 24 hours.
Senator Birmingham said exporters had “felt the earliest and deepest aspects of the economic downturn” triggered by the COVID-19 crisis.
“This temporary action will help Australian producers to protect the jobs of those who rely upon Australia’s export of safe, quality food into the world,” Senator Birmingham said. “Getting our export sector back on its feet is crucial to reduce job losses through the crisis and a critical part of the ultimate economic recovery.”
The government has waived about $10m in Australian Fisheries Management Authority levies for the rest of the year and injected $49.8m into the Export Market Development grants program.
The government's $130bn JobSeeker scheme won support from business leaders and unionists.