Australia Considers Economic Reforms to Aid Post-Virus Recovery

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(Bloomberg) -- Prime Minister Scott Morrison said his government is considering a range of economic reforms to help Australia bounce back from the damage wrought by the coronavirus.

Addressing reporters in Canberra on Thursday, Morrison said it was important to look with “fresh eyes” at a succession of reports made over the years, including recommendations from the Productivity Commission.

The federal budget, which has been delayed until October, “will be a significant contribution in that respect,” Morrison said.

The central bank says Australia’s economy is likely to suffer its biggest contraction since the 1930s, while holding out the prospect of a sharp rebound on the other side of the coronavirus lockdown. Reserve Bank of Australia Governor Philip Lowe earlier this week singled out the taxation system and industrial relations as obvious areas to focus on, along with education and training to ensure the workforce was adequately skilled.

“The scale of the task that we have on the economic front is bigger than anything we’ve known for a very, very long time, arguably since the Great Depression,” Morrison told reporters. “And so you can expect the budget to be very significant in that context.”

Treasurer Josh Frydenberg said the federal and state governments are “working together in a whole field of areas from tax to industrial relations to infrastructure to skills and, of course, to cutting red tape and deregulation.”

Australia is spiraling toward its first recession since 1991 as large tracts of the service sector are shuttered to stem the outbreak. The RBA and government have assembled a massive fiscal-monetary injection worth 16.4% of gross domestic product to aid households and businesses.

©2020 Bloomberg L.P.

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