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Economic downturn will "hit us like a truck": Morrison

National

Scott Morrison has ruled out introducing a coronavirus levy to help repair the national budget, as the economy endures its biggest hammering since the Great Depression.

 

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The prime minister has also talked down the prospect of new or increased taxes to get the economy humming again.

“Increasing taxes doesn’t always grow the economy,” he said.

Morrison said the Australian economy was taking its biggest hit since the Great Depression of the 1930s.

He described the Global Financial Crisis as an entree compared to COVID-19.

“This thing is going to hit us like a truck,” he said.

“We need to ensure that on the other side of that, and through it, we are doing everything we can to ensure the recovery is as strong as possible.”

Treasury and the Reserve Bank have warned the policy mix will need a major overhaul if the Australian economy is going to grow once the crisis subsides.

Opposition Leader Anthony Albanese said the economy was already struggling before the coronavirus and bushfires over summer.

He is open to revisiting legislated income tax cuts that have not yet taken effect, but is concerned the coalition could pursue industrial relations reforms to dig Australia out of debt.

“What we don’t want when we get through this crisis is for the government to just return to its old ideological position of attacking the rights of working people,” Albanese said.

“If the government’s response post this crisis is to further undermine our unions and to attack wages and conditions of working people, then that will not help the recovery, it will not help growth.”

Morrison also said it will be at least four weeks before the easing of strict national restrictions to curb the spread of coronavirus.

Before any measures are scaled back, federal and state leaders want crucial benchmarks met to ensure the nation could handle a spike in cases.

This includes a broader testing regime, better contact tracing through a mobile phone app and a greater capacity to respond to local outbreaks.

Morrison said some parts of the economy could be restarted in mid-May if those goals are met, but he expected social distancing measures to remain in place until a vaccine is available.

“If you ease off too quickly too early, then you end up making the situation even worse, and I don’t just mean in the health terms,” he said.

“If you move too early and the health response gets out of control, then the economic consequences will be even worse.”

National cabinet will meet again next Tuesday, where an easing of elective surgery measures will be discussed.

Leaders remain divided over whether students should return to school, with Morrison saying education is a matter for the states.

He maintains there is no health risk for students and that teachers are more likely to contract the disease in the staffroom than in the classroom.

National cabinet has decided on a set of principles for schools, including protections for teachers and a commitment to education.

“The best place for a child to get an education is in a classroom in front of a professional teacher,” Morrison said.

-with AAP

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