RUBY:

From SM I’m RJ this is 7am.

Scott Morrison has finally begun to acknowledge the serious economic cost of coronavirus, and speculation is growing over his next stimulus package.

But with secrecy and confusion still rampant, questions are being asked about whether the government is up to the economic challenge.

Today, Columnist for the Saturday Paper Paul Bongiorno, on the future of the economy and the Prime Minister.
Paul, when did it all start to bite for Scott Morrison?

PAUL:

Well, Ruby, it started biting well at least four weeks ago, but by Wednesday this week, the Prime Minister accepted that he and the nation were being swallowed whole.

Archival Tape - Scott Morrison:

Well, good morning, everyone. Life is changing in Australia as it is changing all around the world.

PAUL:

Scott Morrison held a press conference in the prime ministerial courtyard and he finally admitted his world had crumbled.

Archival Tape - Scott Morrison:

Life is going to continue to change as we deal with the global Coronavirus.

PAUL:

He called it a one in 100 years event, something of a scale we haven't seen since World War One.

Archival Tape - Scott Morrison:

We haven't seen this sort of thing in Australia since the end of the First World War. But together we are, of course, up to this challenge, all Australians, governments, health workers...

PAUL:

He also said that together we were up to the challenge. Well, this last bit is open to question.

RUBY:

Paul, is what we’re hearing here just a public acknowledgment… of something that the government has known about and been dealing with for several weeks?

PAUL:

Well, yes, it is. A week ago, in a confidential briefing note from Health Minister Greg Hunt office, the government's strategy was spelt out and dot points and the task ahead of it. Of course, it's all numbers with a crisis like this. The aim, according to the note, was to flatten the bell curve. It said the government expected to have, quote, 1 to 2 million infections per month. Worst month expected by June, easing by September, and all done by December.

While other analysis I received this week is that if the government had done nothing more, there would have been 2000 new cases by next week and 1.5 million infections by Anzac Day. The rate of infections in the past week has been growing on average of 23.7% per day. But this analysis says that we can halve that rate. We could cut the Anzac Day figure to just 37000 cases. Still a lot of people.

RUBY:

So, Paul, tell me about the political measures that would be needed to get to that reduced rate.

PAUL:

Well, Scott Morrison has called for national unity and resolve. He’s created a national cabinet. It's made up of himself, the premiers and chief ministers. And that's been widely welcomed. On Tuesday night, there was a teleconference among them. It went very late as a raft of new measures to contain the virus were agreed. Out of that meeting, Australians were advised not to travel overseas and to come home quickly.

Archival Tape - Unidentified reporter:

The Prime Minister has taken the unprecedented move of raising the government’s travel advice to Level 4 for the entire world.

Archival Tape - Unidentified reporter:

A million Australian’s go overseas every month, but the shutters are going down.

PAUL:

Restrictions on nursing home visits, restricted indoor gatherings to up to 100 people - in addition to the already announced 500 ban for outdoor events.

Archival Tape - Unidentified reporter:

He also announced a ban today on all non-essential indoor gatherings of more than 100 people, the limit for outdoor gatherings will remain at 500.

PAUL:

But you know, Morrison's unwillingness to invite Labour leader Anthony Albanese into this Cabinet I find jarring. The fact is the government needs the opposition's support to get its measures quickly through the parliament. And the Labour leader readily agreed to the prime minister's suggestions to limit the number of MPs needed in Canberra next week to pass legislation. It'll be 90 and the representatives with pairing arrangements, maintaining the government's majority.

RUBY:

And the aim of that is to prevent the spread of the virus among our politicians?

PAUL:

Well, indeed, Ruby, because our politicians are as vulnerable, if not more so, given their public duties as everyone else. In fact, three federal politicians, two coalition senators and Cabinet Minister Peter Dutton have already tested positive for the Coronavirus. The government whips are using encrypted WhatsApp messages, telling politicians to advise them immediately if there are new cases and not to tell the media first.

RUBY:

So there's some secrecy there then?

PAUL:

Well, I got to say, secrecy and confusion, which have been features of the government's response to date. Some on the government backbench are worried Morrison's handling of the crisis has been a long way from convincing one. In fact, one told me Morrison was out of his depth.

Probably the most telling example was the confusion last weekend over hand-shaking, Morrison said it was safe on Sunday morning only to say it wasn't by Sunday afternoon. And then there was the spectacle of the Prime Minister having to clumsily backtrack on his determination to go and see his beloved league team, the Sharkey's, as he calls them, play the South Sydney Rabbitohs.

Archival Tape - Scott Morrison:

The fact that I would still be going on Saturday speaks not just to my passion for my beloved Sharks, it might be the last game I get to go to for a long time.

PAUL:

Well, Albanese read the mood better than the prime minister, and he pulled out first from saying he was going to the game. You know, Ruby, it must have hurt Albo because his Rabbitohs in fact, beat Morrison's team.

RUBY:

We’ll be back in a moment.

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RUBY:

Paul, we're talking through the government response to Coronavirus, which has ramped up this week. Can you tell me about how last week's stimulus package has played out so far?

PAUL:

Yeah, well, on the economic front, it's worth contrasting Morrison's package with New Zealand's. The Ardern government announced a massive stimulus package close to 4 percent of GDP.

Archival Tape - Unidentified reporter:

The Government has unleashed what it calls ‘the most significant peacetime economic plan in New Zealand’s modern history.’

Archival Tape - Unidentified reporter:

Finance minister Grant Robertson introduced his 12 billion dollar economic response package...

Archival Tape - Unidentified reporter:

It includes wage subsidies, extra welfare payments, business tax breaks, and healthcare funding

PAUL:

Australia's first effort of $17.6 billion dollars was just under 1 per cent and delayed till next month. Well, it's only taken seven days for the penny to drop. This was well short of the mark. And I think one thing that helped show the government its stimulus was not going to be enough was the dramatic collapse in travel threatening the viability of airlines. After cutting some of its international flights, Qantas has now dramatically cut them all and reduced domestic ones by 60 per cent. Virgin suspended all its international flights and cut its domestic services by half. Now, Morrison's response to that was a $715 million relief package for the aviation industry waiving fuel excise and other charges. If he has to do more, some liberals say - backed by a number of economists - that the taxpayers should take equity in the airlines. In other words, buy in so that when the recovery comes, the government can then sell those shares. And that will help in budget recovery.

RUBY:

And what about the rest of the economy, Paul?

PAUL:

Well, Finance Minister Mathias Cormann on Tuesday spoke of the grim reality that some businesses would close because of the economic fallout from the Coronavirus. Like his cabinet colleagues, he focussed on hospitality and tourism. But as more and more people come to terms with what social distancing means, and as bans on indoor gatherings of 100 people or more are applied, the word some is an understatement.

I spoke to respected economist Chris Richardson, who told me a stimulus package of $100 billion or more could be needed.
The government is planning to have its next big package in place before parliament sits next week on Monday. There's speculation it'll announce a round of loan guarantees for banks to help prop up businesses, which could stretch the stimulus to $40 billion. There's also a new temporary wage for those who lose their jobs because of the virus. And it's expected to set a rate higher than Newstart, which has been called a transitional support income.

RUBY:

Paul, there was a Newspoll out this week. What did it tell us about how the country is assessing Morrison's handling of this pandemic?

PAUL:

Newspoll found a hugely significant 76 per cent of Australians were worried about the impact of the virus on the economy, which translates to worries about their own economic security. About half were worried about the preparedness of our public health system. And I got to say, their worries were justified in light of reports of insufficient test kits, insufficient surgical masks and even swabs and protective gear for medical workers running out in many parts of the country and in some hospitals

And in the Newspoll, Morrison, after trailing Albanese as preferred PM since the January fires, in fact regained a four point lead as preferred PM. Although the coalition still lags Labour and the Prime Minister's performance is 12 points in the negative. Well, Morrison warned on Wednesday there's no quick fix and the situation is changing daily, if not hourly.
But by his own prognosis, the Prime Minister has another six months of crisis to rise to this enormous challenge.

RUBY:

Paul, as always, great to talk to you.

PAUL:

Thanks, Ruby. It’s certainly worrying times. Bye.

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RUBY:

And the latest on the coronavirus outbreak:

The federal government has announced a total travel ban on everyone arriving in the country aside from Australian citizens and residents from 9pm tonight.

The travel ban comes as both Qantas and Virgin grounded their international fleets. Qantas has also suspended the majority of its 30,000 strong workforce.

The Reserve Bank has cut interest rates to the record low rate of zero point two five per cent. The RBA also said it would provide $90 billion to banks if they lend that cash to small and medium-sized businesses.

The government announced it would give $15 billion to smaller lenders to give credit to consumers and small businesses.

And for the first time since the coronavirus crisis began, China yesterday reported no new local infections, a significant milestone in the country’s battle with the outbreak.

Chinese officials said 34 new coronavirus cases had been confirmed, but they all involved people who had come to China from elsewhere.

7am is a daily show from The Monthly and The Saturday Paper.

It’s produced by Ruby Schwartz, Atticus Bastow, and Michelle Macklem.

Elle Marsh is our features and field producer, in a position supported by the Judith Neilson Institute for Journalism and Ideas.

Brian Campeau mixes the show.

Our editor is Osman Faruqi. Erik Jensen is our editor-in-chief.

Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio.

New episodes of 7am are released every weekday morning.

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I’m Ruby Jones, see you next week.