Dear Friend,

Through decisive, early, and coordinated action, Australia is flattening the curve. 

We have seen the growth in the number of coronavirus cases go from more than 20 per cent per day just weeks ago, to less than half a percent today. 

Adjusting for population, the death toll in the United Kingdom is over 110 times that of Australia. In France it is over 100 times, and in the United States, over 50 times.

The economic shock the world is now confronting dwarfs the Global Financial Crisis.

During the GFC, the global economy contracted by just 0.1%. The IMF is projecting a 3% contraction in 2020. 

In the last four weeks alone, 30 million Americans have filed jobless claims.

China’s GDP fell by 9.8 per cent in the March quarter, the first drop on record.

Italy, France and Spain have also seen the largest quarterly GDP falls on record. 

For Australia, Treasury is forecasting a GDP fall of over 10% in the June quarter. 

Unemployment is forecast to reach 10% in the June quarter. But for the JobKeeper package, Treasury forecasts it could have risen to 15%.

Australia has suppressed the virus without having to resort to a full lockdown.

National Cabinet has signalled that from this Friday, it will look to further ease restrictions.

We must get people back into jobs and into work. 

For every extra week the current restrictions remain in place, Treasury estimates a $4 billion reduction in economic activity.

Throughout this health crisis our priority has been to keep the economy going.
 
For example, more than 725,000 businesses, employing more than 4.7 million Australians have registered for our JobKeeper program.

Entering this crisis, Australia’s Budget was back in balance for the first time in 11 years. Our net debt to GDP was around a quarter of that in the US and UK. 

Our ability to handle this crisis is a reminder of the importance of a strong economy.

The proven path for paying back debt is not higher taxes, but growing the economy. 

While the economic shock created by this crisis will be profound, we can remain optimistic about our future.

Regards, 

Josh Frydenberg
Treasurer