Older Australians, who will benefit from Scott Morrison’s coronavirus stimulus package, say they would prefer to save the money rather than squander it, as the Prime Minister has urged them to do.
Mr Morrison on Thursday announced a one-time payment of $750 to 6.5 million retirees as part of a $17.6 billion package aimed at injecting cash into the economy as businesses struggle from coronavirus disruption affected have stalled.
However, some experts say the package was aimed at the wrong people and will not achieve the desired result – saving Australia from recession.
Struggling retirees say they will save the $750 stimulus money. Health experts say they want people to be isolated. Economist Steve Keen says the focus should be on helping people pay their bills and mortgages while staying at home during the pandemic lest they be ruined
The idea was that retirees would immediately spend the money on goods and services to stimulate the economy and keep businesses afloat.
Dee Friend, 87, a resident of RSL Anzac Village Narrabeen on Sydney’s Northern Beaches, said the cash award was too valuable to spend frivolously as many retirees struggle with the high cost of living.
Another resident, 82-year-old David Picknell, said he wouldn’t spend it either.
“We’ve all lost money for so long because the interest rate was above what we were getting, so we can replenish our accounts,” he told The Australian.
University College of London economics professor Steve Keen said the cash injection was insufficient.
“This is a complete failure to understand the scale of the issues,” Professor Keen said on his Patreon blog.
“[You need]something on the order of $10,000 that will pay for 2 to 3 months of rent, mortgage payments and groceries, and we need to give that to everyone.”
Professor Keen said on his blog that people need to be protected from defaulting on their bills and mortgages for the time they may be in quarantine and unable to make a living.
Older retirees and those on Newstart and disability pensions will get the $750 payment, but casual workers who don’t have sick leave will miss out
Australia has three million casual workers who are not entitled to sick pay. So when they are sick or have to take time off work to care for a loved one, their income streams are cut off.
You’re missing out on every cash payment under the stimulus package.
If they lose their jobs due to the coronavirus, they are entitled to ‘sick pay’ instead.
The prime minister said on Thursday that equates to the Newstart payment, which is just over $279 a week for a single person with no children.
Professor Keen said the pandemic is the biggest physical threat to the economy since World War II.
“Capitalism must be suspended until we beat the virus,” he said.
“A credit-driven private sector monetary system is incapable of handling such a systemic crisis,” he wrote on his Patreon blog.
Professor Keen has long been a proponent of a modern debt jubilee to iron out the dislocations in the economy caused by the 2008 financial crisis and extremely high levels of debt.
Prime Minister Scott Morrison faces the toughest test of his leadership since the bushfire crisis as he tries to keep the economy solvent during the coronavirus pandemic
Professor Keen said the coronavirus crisis is exactly the time when that would help and urged the government to give people a per capita payment so they can pay their bills and mortgages while in isolation.
He said the government could issue $200 billion in coronavirus bonds — even at zero percent interest — to raise funds for emergency payments.
A flat rate for everyone, rich and poor, should give people enough for an effective three months’ worth of lockdown without punishing anyone unfairly and would keep the velocity of money high, he said.
Further measures could also help avoid a financial crisis in Australia, such as suspending normal corporate and bank insolvency rules.
Italy is the world’s first example of a developed western country with a significant coronavirus outbreak.
Though the country of 64.5 million had just over 12,450 cases of the virus as of Thursday night, its healthcare system is on the brink of collapse.
Italy is now under quarantine.
All shops are closed in Italy except for groceries and pharmacies in Europe’s toughest lockdown, BBC news reported on Thursday, as shops were closed and events canceled to slow the spread of the virus.
