Australia Closing Borders amid Pushing $56 Billion for Economy Support and Fear of Unemployment  

Australian Prime Minister (PM), Scott Morrison announced on Thursday, March 19, 2020, that all non-Australian foreigners would be prohibited from entering the country from 9 pm (1000 GMT) on Friday.

The latest move of the Australian government was announced due to the fear of further escalation of coronavirus infection and the majority of the virus-infected cases of the country originated overseas. As the virus epidemic has shattered the country’s financial condition, the government has also introduced about A$100 billion ($56 billion) to strengthen its economy due to fear of unemployment problems.

Impact of Virus

Nearly 600 virus-infected cases have been reported while death record reached six in Australia and officials were concerned about the possibility of the rise of the virus epidemic. Citing the new move that restricted foreigners’ travel in the country, Morrison told Australians in a televised news conference, “For the next six months we need to work together. We do need to moderate our behavior and understand things need to change.”

Almost simultaneously, the neighboring country, New Zealand also announced the same measure that banned foreign travelers from Thursday evening. Morrison said that the ban on foreign arrivals in Australia has been imposed indefinitely while the government allowed some flight services including its national carrier Qantas Airways Ltd. (Qantas) to bring Australians home.

The national lockdown on the aviation industry and restriction on global travel would have a major impact on several airline employees in Australia. With the lockdown of all international flights and domestic services, Qantas on Thursday has decided to put 20,000 employees on leave until at least the end of May.

Citing the talks initiated by Qantas to a grocery company, Woolworths Group Ltd. (Woolworths) about redeploying some of its workers, economists pointed out the talk would not help in addressing the surge of expected unemployment rate in the country.

Economic Support

In an attempt to boost its economic support, the Australian government and central bank have injected their financial response to avoid the condition of its first recession in nearly three decades. The Reserve Bank of Australia (RBA) has initiated to cut its interest rates in an all-time low and introduced A$15 billion in loan support for small and medium lenders as part of a quantitative measure.

The RBA Governor, Philip Lowe said in a speech in Sydney, “To help us get to the other side we need a bridge… Without that bridge, there will be damage, some of which will be permanent to the economy and to people’s lives.” Reuters reported, “The RBA, which has been pumping money into the system throughout the week to ensure business and households have access to credit, cut rates to a record low of 0.25%.”

The central bank also announced an A$90 billion lending package for the country’s banks besides adding package for the small and medium businesses to an A$17.6 billion announced earlier this month. The Treasurer of Australia, Josh Frydenberg said a planned second package “will be substantially different” from the first budget announced which means a significantly large sum of money has been reserved for the sector.

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