Treasurer warns second lockdown will devastate economy

Josh Frydenberg has pleaded with Australians to follow the guidelines, setting out the huge cost of another shutdown.

Treasurer warns second lockdown will devastate economy

Treasurer Josh Frydenberg says the economy will expand by nearly $10 billion a month once COVID-19 restrictions are lifted, but he's warned Australians of the huge cost if a second lockdown is needed.

Mr Frydenberg was originally scheduled to deliver his second budget tonight, but instead outlined the massive impact to the economy of the coronavirus pandemic.

Calling it a "one in a hundred year event" that has put the Australian way of life on hold, the treasurer said COVID-19 was a health and economic shock, the likes of which the world has never seen.

National cabinet met last week to layout the framework to re-open the economy, with a three-stage plan that each state will work through at its own pace.

Mr Frydenberg told parliament that the easing of restrictions will make a huge difference to the economy.

"Treasury estimates that with the restrictions lifted under the three separate stages, 850,000 people will be back at work," he said.

"More than half of those workers will come from three sectors, with 338,000 jobs in accommodation and food services, 76,000 jobs in arts and recreation, and 71,000 jobs in transport, postal and warehousing.

"Treasury estimate as a result of easing the restrictions in line with stages one, two and three, GDP will increase by $9.4 billion each month."

Timeline of coronavirus cases in New South Wales, Australia

But the treasurer pleaded with Australians not to flout the restrictions that are still in place, warning that any need to re-impose lockdown laws would come at a massive cost to the economy.

"If our largest state, New South Wales, had to reimpose restrictions, equivalent to those in place before the May 8 national cabinet meeting, it will cost its economy around $1.4 billion per week," Mr Frydenberg said.

"For Victoria, the cost would be around $1 billion. In Queensland, $800 million, in Western Australia, $500 million, in South Australia $200 million, in Tasmania $100 million, in the ACT, $100 million, and in the Northern Territory, $40 million per week. 

"This is the economic cost we all have to bear if we fail to act."

With the $1500 JobKeeper program scheduled to finish in September, Mr Frydenberg warned that the extra assistance can't continue indefinitely.

The treasurer said there is "no money tree" and noted there will be a significant increase in government debt that will take many years to repay.

While the latest budget figures only take into account the early weeks of the COVID-19 lockdown, the budget deficit to the end of March was $22.4 billion, nearly $10 billion worse than forecast.

That figure is expected to significantly worsen when April is taken into account, with the treasurer confirming the numbers for the June quarter will be worse than ever seen in Australia.

"Treasury is forecasting GDP to fall by over 10 percent in the June quarter, which would represent our biggest fall on record," he said.

Treasurer Josh Frydenberg says a second lockdown would devastate the economy.

"At $50 billion, this is a loss equivalent to the total quarterly production of South Australia, Tasmania, the Northern Territory and the ACT.

"Treasury is forecasting the unemployment rate to reach around 10 percent, or 1.4 million unemployed in the June quarter.

"The five percentage point increase in the unemployment rate is expected to occur over three months, compared to the three years it took to unemployment rate to rise by the same amount in that devastating period of the early 1990s."

Mr Frydenberg ruled out raising taxes to fill the budget black hole, saying the proven path for paying back debt is through growing the economy through productivity-enhancing reforms.

The Opposition has branded the economic update a "missed opportunity", saying the situation was already dire before the pandemic.

"The economy was already weaker than what they wanted us to believe," Shadow Treasurer Jim Chalmers said.

"Even before the fires, even before this coronavirus, wages and living standards were already stagnant.

"Work was already too precarious and too insecure, for too many people, for too long."

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Bitcoin's historic 'halving': Why crypto experts are expecting a second explosion in value

Cryptocurrency make experience a resurgence after Bitcoin experienced its historic "halving" event.

Bitcoin's historic 'halving': Why crypto experts are expecting a second explosion in value

Bitcoin could be back on the agenda for plucky investors after the infamous cryptocurrency experienced a triggered "halving" event this morning.

At 5.23am AEST the cryptocurrency produced its 630,000th block and triggered the third-ever halving event in Bitcoin's 11-year history.

In a nutshell, Bitcoin "halves" roughly every four years as a way to reduce the reward given to programmers who "mine" the currency using high-powered computers and complex algorithms.


Bitcoins are mined by specialised computer hardware which solves algorithms (or "blocks") on a central banking sheet known as a blockchain.

To keep the value of existing Bitcoins, every 210,000 blocks the reward given for mining halves as a way of artifical inflation.

Only 21 million Bitcoins will ever be generated by the network, prompting some experts to believe that a second bull run of value is on the cards.

"History teaches us that after this post-halving drop in price, there is a subsequent bull run," CEO and founder of deVere Group Nigel Green said.

"Previous Bitcoin halving events have prompted impressive price climbs. The 2016 halving triggered a 300 per cent jump in the value of Bitcoin.

"There is no reason to believe this time the market will not respond with a longer-term upward trajectory."

Bitcoin is a cryptocurrency and worldwide payment system.

Currently Bitcoin is trading at just under A$13,500 per coin. If Mr Green's forecast of a 300 per cent rise comes true that value could skyrocket up to more than $40,000 per coin.

Mr Green believes that current unrest over governments handling the COVID-19 pandemic could also push some investors towards decentralised currencies like Bitcoin.

"Traditional currencies are devalued and inflation fears rise on the back of the mass printing of money, the likes of which we have recently seen in the US, where the nation's central bank has added trillions of dollars to the money supply," Mr Green said.

"Such measures will inevitably encourage even more investors to consider decentralised, non-sovereign digital currencies.

"Looking ahead beyond the halving event, cryptocurrencies are increasingly becoming regarded as the future of money due to the real-world issues they address and growing mass adoption."

Explained simply: What is Bitcoin?

  1. Bitcoin is a form of online cryptocurrency that allows money to be transferred electronically. It's decentralised, which means no-one regulates or controls it except for market demand.
  2. It was created by a group (or a single person) of programmers under the pseudonym "Satoshi Nakamoto" in 2009.
  3. Bitcoins are "mined" by computers that solve incredibly complex mathematical equations. Like coal or oil, there is a limited number of Bitcoins available to be mined, estimated to be in the ballpark of 21 million.
  4. You cannot mine Bitcoin on your home computer, it requires specialised programs and hardware that have increased the difficulty of mining a Bitcoin.
  5. Bitcoin experienced a dramatic explosion in value in late 2017, before it experienced one of the most catastrophic value crashes ever seen in currency.

For breaking news alerts and livestreams straight to your smartphone sign up to the and set notifications to on at the or

You can also get up-to-date information from the Federal Government's Coronavirus Australia app, available on the , and the .

Source : 9 News More   

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