PM planning next wave of stimulus

The prime minister Scott Morrison is expected to announce a second stimulus package – this time focusing on self-employed and households – as the impact of the coronavirus pandemic continues to have an effect on the Australian economy.

AFR reports the PM is set to sit down with the treasurer Josh Frydenberg and finance minister Mathias Cormann to nut out the details of the package. The move comes just a week after the PM announced a $17.5 billion stimulus package aimed to safeguard the Australian economy through the coronavirus crisis.

Further stimulus was slated to be announced in May alongside the budget, however, it is understood the PM has now recognised there is an urgent need for further assistance to see the nation through the crisis.

Simultaneously the Reserve Bank of Australia (RBA) has said it will begin quantitive easing measures in an effort to stave off a recession and stimulate the economy. With Australia’s stock market taking a hammering in the past few weeks, the RBA will begin the process of buying up government bonds from Thursday.

RBA governor Dr Philip Lowe said on Monday the central bank “stands ready to purchase Australian government bonds in the secondary market to support the smooth functioning of that market, which is a key pricing benchmark for the Australian financial system.”

Lowe said the bank will announce further measures to support the economy on Thursday.

“Australia’s financial system is resilient and it is well placed to deal with the effects of the coronavirus,” Lowe said.