An investor checks share prices at the Australian Stock Exchange in Sydney. Associated Press
Australia announced on Wednesday a health package worth A$2.4 billion ($1.56 billion) that proposes setting up fever clinics, among other measures to rein in the spread of a coronavirus, as it prepares to announce further stimulus.
Australia has been struggling to contain the disease, which is expected to take a significant economic toll, with the Treasury department warning of a cut in first quarter economic growth of at least half a percentage point.
“Just under $1.2 billion of that will actually, we anticipate, be spent this financial year, particularly as the virus and its impacts ramp up in the months ahead,” Prime Minister Scott Morrison told reporters in Canberra, the capital.
The federal government said the latest funding package would include the A$500 million announced last week to support the costs to the health system from the outbreak.
It will include free video consultations for people in self-isolation and quarantine.
“We are ensuring people can access essential care in a way that reduces their potential exposure to infection,” Health Minister Greg Hunt said.
The government says it will announce an additional multi-billion-dollar economic stimulus package on Thursday.
Broadcaster Sky News said the stimulus package was expected to be worth as much as A$20 billion and would include one-off individual cash payments of about A$500 to pensioners, those claiming unemployment benefits and small businesses.
The Prime Minister’s office declined to comment on the Sky News report, which cited government sources.
Morrison later told the broadcaster that the package included arrangements for the government to pay half the wages of about 117,000 apprentices at small businesses that employ fewer than 20 people, at an expected cost of A$1.3 billion.
“That’s about keeping young people in jobs and keeping them in training,” Morrison said in an interview with Sky News.
Ratings agency S&P said Australia’s coveted “AAA” credit rating was not under immediate threat from a likely technical recession and the expected stimulus package was unlikely to strain creditworthiness.
The full impact of the virus outbreak on Australia’s economy is still uncertain, but the combined effect of fiscal and monetary policy would support activity, said Guy Debelle, deputy governor of the Reserve Bank of Australia.
Australia also extended a travel ban for Italy on Wednesday, after Italy expanded a lockdown across the entire country to contain the spread of the virus.
Australia has already barred those arriving directly from mainland China, Iran and South Korea, except for citizens and permanent residents, in a bid to halt the spread.
It had 112 virus infections by Wednesday, up from 100 the previous day, health officials said, with a tally of three deaths.
Meanwhile, Australia’s highest court on Wednesday dismissed an appeal by BHP Group against a tax ruling, the latest loss for the global miner over the treatment of profits from commodities sold out of its Singapore marketing hub.
BHP said in a statement the decision offered clarity on the interpretation of a technical area of Australian tax rules, and it would pay $87 million in additional taxes for income generated over 2006-2018.
The dispute was over whether BHP should pay so-called “top up tax” in Australia on profits made by its Singapore marketing hub from selling coal from an Australian mine owned by the UK side of BHP’s dual-listed structure, BHP Group Plc.
The High Court of Australia upheld a federal court ruling that commodities acquired from Australian subsidiaries of BHP Group Plc are subject to “top up tax” in Australia under “controlled foreign company” rules.
BHP had argued that its marketing hub in low-tax Singapore creates value, such as by negotiating specialised coal blends, for which extra profits should not be subject to additional tax.
The tax office held that profits on commodities dug out of the ground in Australia should be subject to the country’s tax and royalty systems, no matter where they are sold from.
The Australian Tax Office said in a statement the court decision finalised the dispute over marketing hub profits, which would be “fully taxed in Australia”.
BHP said the additional tax represented less than 0.2% of the about A$71 billion ($46 billion) it had paid in taxes and royalties over the past 10 years.