The data released on Monday shows the gross domestic product impact on the economy would be $402.6 billion, or 20.7 per cent, in calendar 2020 if a longer-term “U-shaped” recovery option was implemented.
This compared to a $197.3 billion loss with a one month “V-shaped” recovery plan, or a $278.3 billion loss if a three-month “V-shaped” recovery was implemented, the BCA modelling found.
The federal government has already flagged the restrictions and measures set up around the virus could remain for six months.
The business lobby group, which is campaigning for an early easing of restrictions to get the economy going again, also said Australia must consider whether changes to industrial relations and taxation laws adopted during the crisis should continue.
“Workplace relations system must be simpler and our enterprise bargaining system must work better for employers and employees,” Business Council chief executive Jennifer Westacott said on Monday.
“Regulations which have been suspended during the COVID-19 crisis should be properly considered before they are reinstated.
“We now need to ensure we also have the advantage of an efficient and competitive tax system that actually attracts investment to our shores.”
The lobby group has called on governments to “act on the quick reforms that will get new investment flowing and get started on the bigger, more long term growth plan”.
The modelling shows that the way the economic recovery is managed will be critical to ensuring people who have already lost their jobs do not fall into the trap of long-term unemployment, the BCA said.
Older Australians, and those with “high school or below education” would be worse off.
The BCA research found that before government assistance, 40 per cent of workers who would have lost their jobs were already at the highest risk of falling into long term unemployment.
“These are the same group of people who never found work again after the recession of the 1990s,” Ms Westacott said.
“So, it’s important we do everything we can to make sure they are not left behind.”
Workers in the accommodation, food, retail, construction and manufacturing sectors have been hardest hit by the crisis.
NAB slashes dividend, “expects recession”
Meanwhile, National Australia Bank has slashed its interim dividend to 30 cents as first-half cash earnings dived 51.4 per cent to $1.46 billion in a surprise early release of the lender’s interim profit result.
The dividend cut from 83 cents a year ago comes as NAB increases its collective provisions for forward-looking economic and targeted sector adjustments by $828 million to $2.14 billion.
NAB has also announced a combined $3.5 billion capital raising through a placement and share purchase plan to help bolster its balance sheet.
Statutory net profit for the half-year ended March 31 was $1.31 billion.
The big four lender had been due to publish its half-year profit result on May 7.
Chief executive Ross McEwan on Monday said the bank was taking proactive steps to shore up its balance sheet as the nation faces a possible “prolonged and severe economic downturn”.
“There is much uncertainty as to how long this period of dislocation will last and the outlook for recovery,” McEwan said.
“Necessary interventions to contain the spread of COVID-19 are having wide ranging impacts across the Australian and New Zealand economies, with sectors such as airlines, retail trade, hospitality and commercial real estate severely impacted.
“Our expectations are for a recession and much higher unemployment over 2020 and into 2021.”
Prudential regulator APRA this month advised the banks to suspend their dividend payments until there is more certainty around the economic landscape.
McEwan said the decision to pay a dividend was a balancing act that recognised the bank’s retail shareholders.
“I can tell you retail shareholders will not be happy with a dividend reduction but we believe we have done the right thing,” he said.
(About) 48 per cent of shareholders do rely on a dividend … at the time of a placement you don’t want the share price dragged down.”
Gaming giant cuts staff, pay, dividend
Aristocrat Leisure will cut staff and impose pay cuts on employees and management and won’t declare a dividend as it copes with the fallout from COVID-19 lockdowns.
The poker machine manufacturer is standing down 1,000 staff from May 1 until June, eliminating another 200 roles and transitioning another 200 jobs to part-time until September.
An Aristocrat Leisure spokeswoman says most of the stood-down roles are in the United States, where the company has the bulk of its workforce, but it has also stood down “a few hundred” workers in Australia.
It is also cutting the pay of 1,500 of its 4,000 staff until the end of September.
Most of the pay cuts are from 10 to per 20 per cent, while chief executive Trevor Croker takes a 30 per cent reduction in his base salary.
The gaming company on Monday said it would apply the JobKeeper employment subsidy to protect as many jobs as possible in Australia and was working to determine its eligibility for government stimulus measures in the United States.
The company usually earns an average of $US50.46 ($A78.77) a day from each of its 48,218 gaming machines across North America, for an average daily haul of about $A3.8 million, but almost all its land-based customers have suspended operations.
“While highly uncertain, at this stage Aristocrat anticipates that venue reopenings will take place on a phased basis, with a gradual ramping up of gaming floors in line with improvements in consumer confidence and the wind back of social distancing and travel limitations over time,” the company said.
But its digital business – which Aristocrat derived 40 per cent of its revenue from – has performed strongly during the lockdowns, with higher books and player engagement.
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