Katie Allen (Higgins, Liberal Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer update the House on the impact of coronavirus on the economy both here in Australia and around the world?

Josh Frydenberg (Kooyong, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Deakin for her question. She is a professor and a paediatrician and she has been a medical researcher at the Royal Children's Hospital for some 28 years, and she knows better than most the significance of the spread of coronavirus and the importance of the measures that we are undertaking in response.

Coronavirus is having an impact on economies right around the world. It's very different to the global financial crisis, which had its genesis in liquidity issues and in the stability of financial markets. This is first and foremost a health crisis, which is having a significant economic impact around the world. The issue of coronavirus and its spread will be solved by medical researchers and scientists, not by economists. That being said, central bank governors and finance ministers from around the world are deploying both monetary and fiscal policy in order to stabilise their economies.

Last night I joined a telephone conference call with the head of the International Monetary Fund, the head of the World Bank, my counterpart from the United States and my counterparts from China, Japan, Korea, Singapore and other countries. It was an opportunity to exchange notes about how each country is responding to the spread of coronavirus. What was clear was that financial markets remain liquid and remain open, but this will be challenging for some time. The International Monetary Fund has announced a $50 billion financing facility in response, and the World Bank has announced a $12 billion package. Here in Australia, the RBA has reduced the cash rate, as recently as this week, and the Prime Minister has foreshadowed a fiscal response from the government which will be targeted, which will be responsible, which will be scalable and which will be designed to keep Australian businesses in business and Australian workers in jobs.

But it is important for the House to acknowledge that this country approaches the challenge posed by coronavirus from a position of economic strength. We saw yesterday, from the national accounts, a lift to growth from the September quarter of 1.8 per cent through the December quarter to 2.2 per cent. As Chris Richardson described it, it was a good set of numbers. We have the confidence and the fiscal flexibility, as pointed out by the OECD when they singled out Australia and Germany as two countries that can respond fiscally to coronavirus without endangering debt sustainability. The hard work that this government has undertaken over the last 6½ years puts us in the best position possible to respond to the economic shock created by the spread of coronavirus.