Analysis of Policies Implemented to Fight Economic Impact of Coronavirus | Report

Running head: ANALYSIS OF POLICIES IMPLEMNETED TO FIGHT ECONOMIC
IMPACT OF CORONAVIRUS
Analysis of Policies Implemented to Fight Economic Impact of Coronavirus
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ANALYSIS OF POLICIES IMPLEMNETED TO FIGHT ECONOMIC IMPACT OF
CORONAVIRUS
Table of Contents
Introduction......................................................................................................................................2
Brief of the policy............................................................................................................................2
Analysis of the policy......................................................................................................................2
Conclusion.......................................................................................................................................4
Reference.........................................................................................................................................5
Appendix..........................................................................................................................................6

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ANALYSIS OF POLICIES IMPLEMNETED TO FIGHT ECONOMIC IMPACT OF
CORONAVIRUS
Introduction
The world economy is hit by the outbreak of coronavirus. It started in China and now has
spread all around the world and causing both health and economic mayhem. Every country is
implementing policies to fight the impacts of coronavirus both the field of health and economy
and Australia is no exception. This report studies the policy implemented by the government of
Australia to save the economy of the country from adverse impact of coronavirus. The report
aims to critically analyse the effectiveness of the policy to fight he cause and along with that put
light on any possibility of generation adverse consequences.
Brief of the policy
With continuous spread of coronavirus and prolong period of lockdown is impacting the
economy of Australia badly. China being one of the largest trading partner has reduced imports
from Australia because of economy of China is facing tremendous pressure after the outbreak.
Thus, with declining export sector and internal economic social and economic situation it has
been estimated that the economic growth of Australia might decline by 0.9% in 2020. Thus, to
save the economy of the country the government of Australia has announced monetary stimulus
of $17.6 billion (Treasury.gov.au., 2020). The stimulus is announced with objective of
maintaining the business confidence in the economy, provided support to the investments and
ensuring jobs for people. Apart from that, support will be provided to the businesses and increase
house hold income. This policy is implemented under expansionary fiscal policy. It should be
noted that the government has made commitment of giving aid of extra $2.4 billion for health
sector.

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ANALYSIS OF POLICIES IMPLEMNETED TO FIGHT ECONOMIC IMPACT OF
CORONAVIRUS
Analysis of the policy
The policy taken by the government of Australia is a commendable task because
considering the economic growth rate of country in the past few years it is difficult for the
government to announce such a big fund. However, it is the need of the time and the government
is trying to fight the issues. Using the fund the government is taking responsibility of salary of 40
million workers and supporting the business investments (Murphy & Martin, 2020).
Expansionary fiscal policy increases the income to increase consumption such that economic
growth rises. In this the chances of increase in consumption is less because with continuous of
spread of coronavirus the people will expect that there will be further lockdown and poor
economic condition and thus the will save more for future. It should be kept in mind that
consumption is broadly dependent on future income and in this case, future income of
individuals is uncertain. Secondly, employees that work in most affected sector may get salary
benefit but the firms that is restaurants, movie theaters and hotels will be affected adversely.
Investment funds for these sectors would not fetch enough benefit if economy does not return to
normal operation soon (The Economic Times., 2020). Tourism industry will also remain in
complete cease for the next 6 months or so. This is because as per scientists it is estimated that
the world need another 6 months to stop the virus from spreading. The government of Australia
has made the action plan to spend the fund strategically. The table showing the action spending
the fund is given in the appendix. However, considering the overall economic impact of the
coronavirus it seems that the fund is much less to boost the economy of the country sufficiently
to overcome from the situation. Hence, considering the situation, it can be said that the economy
will face further slowdown in the coming future and there will high job cuts in the most affected
sectors. This funding will act nothing but like a cushion for some time. In the long term, there

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ANALYSIS OF POLICIES IMPLEMNETED TO FIGHT ECONOMIC IMPACT OF
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will be no significant gain from the policy and it most likely fail to meet its objective of
economic growth and ensuring employment (ABC News., 2020). Thus, the policy is not suitable
to implement. It is better to support the affected sectors first and providing subsidy on necessary
goods such as medicine and food. In this way, benefit would reach to the people and there will
no option of not expensing or saving the monetary benefit given by the government.
Conclusion
From the above discussion of the policy taken by the government of Australia to fight the
impact of coronavirus leads to the conclusion that direct funding would not help the economy to
grow in future since the impact of corona virus has not been estimated clearly. Thus, spending
such a fund could provide cushion to the recent economic downturn but will be unable to impact
in the long run.

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Reference
ABC News. (2020). Australian economy may take decade to recover from coronavirus, KPMG
says. Retrieved from https://www.abc.net.au/news/2020-03-16/coronavirus-economic-
impact-could-take-decade-to-recover-from/12058706
Murphy, K., & Martin, S. (2020). Australian government plans coronavirus 'safety net' package
as fresh rate cut tipped. The Guardian. Retrieved from
https://www.theguardian.com/world/2020/mar/19/australian-government-plans-
coronavirus-safety-net-package-as-fresh-rate-cut-tipped
The Economic Times. (2020). Australia unveils $11.4 billion stimulus to curb coronavirus
impact. (2020). Retrieved from
https://economictimes.indiatimes.com/markets/stocks/news/australia-unveils-11-4-
billion-stimulus-to-curb-coronavirus-impact/articleshow/74586306.cms?from=mdr
Treasury.gov.au. (2020). Retrieved from
https://treasury.gov.au/sites/default/files/2020-03/Overview-
Economic_Response_to_the_Coronavirus.pdf

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Appendix
Source:https://treasury.gov.au/sites/default/files/2020-03/Overview-
Economic_Response_to_the_Coronavirus.pdf