State government moves on stimulus
A freeze on household bills, a slight rise of the payroll tax threshold and small businesses grants will form part of a $607 million state government stimulus package, while the Commonwealth and the Reserve Bank of Australia are considering further steps.
Premier Mark McGowan announced the expansionary position today, with the biggest move a $402 million freeze on household fees and charges until July 1 next year.
That will include water, power, public transport fares, motor vehicle charges and the emergency services levy.
It comes after successive state governments increased electricity prices and reduced subsidies to the sector to make prices accurately reflect costs.
The move will allow the average household to keep an extra $127 in their pockets.
About $114 million will be channelled into small and medium-sized business support, with a one-off grant for businesses with payrolls of between $1 million and $4 million.
The payroll tax threshold will increase from $950,000 to $1 million six months earlier than previously announced on July 1 2020.
They can also apply for deferrals of payment.
For pensioners and the most vulnerable, the energy assistance payment will be doubled from $300 to $600, costing $91 million.
"We are in uncharted territory and there's no doubt our economy is going to feel the effects of COVID-19,” Mr McGowan said.
"As a responsible government, we must respond and we must provide certainty to both businesses and households.
"These measures will provide relief to WA families, seniors and small businesses to further support our economy to withstand the headwinds we face.
"For the first time in 16 years, household fees and charges will be frozen, providing relief and certainty to each and every Western Australian.
"It's this relief and certainty that can help give Western Australians the confidence to continue to spend and support our local economy during these times.”
It follows the Liberal opposition lobbying for similar measures, including bringing forward the payroll tax changes and freezing household charges.
It has been reported the federal government is considering a second round of stimulus, just days after a $17.6 billion package was revealed on Thursday.
The first package was already larger than the initial response during the GFC.
In the US, the Federal Reserve cut interest rates by 100 basis points to be between 0 per cent to 0.25 per cent.
That will be backed by a $US700 billion quantitative easing program, it announced after an unscheduled meeting.
“At the same time, trading liquidity has deteriorated in some markets,” Dr Lowe said.
“In response, the Reserve Bank stands ready to purchase Australian government bonds in the secondary market to support the smooth functioning of that market, which is a key pricing benchmark for the Australian financial system.
“The bank will also be conducting one-month and three-month repo operations in its daily market operations until further notice to provide liquidity to Australian financial markets.
“In addition the bank will conduct longer term repo operations of six-months maturity or longer at least weekly, as long as market conditions warrant.
“The Reserve Bank and the (Australian Office of Financial Management) are in close liaison in monitoring market conditions and supporting continued functioning of the market.
“The bank will announce further policy measures to support the Australian economy on Thursday.”