White House trade advisor Peter Navarro urges lawmakers to pass coronavirus relief legislation. (Andrew Harnik/AP Photo)
OAN Newsroom UPDATED 6:35 AM PT – Thursday, November 26, 2020
White House trade advisor Peter Navarro said lawmakers need to “act now” on coronavirus stimulus legislation. While speaking to reporters on Wednesday, he called on lawmakers on both sides of the aisle to put aside their differences to pass a stimulus package.
“The administration has done a very good job up to this point,” he stated. “We are facing, however, a chasm ahead for millions of Americans unless there can be a bipartisan ‘come to agreement moment’ on these core elements.”
In September, 23 Democrats pledged to work with Republicans to pass COVID relief if Nancy Pelosi refused to get a deal done.
It’s almost December. Nancy Pelosi is still playing her games.
Navarro went on to stress the need to save small businesses, noting if those are lost then they are not coming back. With many states reporting an increase in cases, business owners have expressed their concerns that they will be unable to survive another round of lockdowns.
Restaurant owners reported spending thousands of dollars in modifications to adapt to local and state requirements to feed guests outside only to have many major cities like Los Angeles adopt new policies forcing them to close anyway.
Navarro said despite the stalemate, Congress needs to focus on three major components: the Paycheck Protection Program, relief checks and unemployment compensation.
The White House trade adviser said he anticipates a second term for President Trump and the administration will continue on the path for strong economic recovery.
RELATED: Outdoor dining ban moves forward in L.A. County despite decision being based on scarce data
The Reserve Bank of Australia has a message for the Australian government: don’t pull out too early.
In a speech to Australian Business Economists, the deputy governor of the RBA, Guy Debelle, reiterated the importance of government stimulus to the economic recovery.
Just a day after the RBA released research showing the jobkeeper wage subsidy the jobkeeper wage subsidy – due to end in March – saved 700,000 jobs, Debelle said there were lessons from the global financial crisis which translated to the world’s current economic system. Among them: don’t cut off support too early.
“Be careful of removing the stimulus too early,” he said.
“A number of European countries learned this lesson to their cost after the global financial crisis.”
Australia’s banks and governments were well placed to keep credit and stimulus lines running, Debelle told the group, and that money was crucial to ensuring Australia’s economic recovery as the pandemic response rolled on.
“Banks with strong balance sheets can lend to businesses and households to support the economic recovery, rather than being concerned with restoring balance sheets as has been the case in previous cycles,” Debelle said.
“The strong capital buffers of the banks are there to be used, not preserved.”
The lesson was to “keep the credit flowing”.
Central banks, such as the RBA, had played their role in helping to stabilise government bond markets, and in Australia at least debt was cheap.
“Public sector debt remains low as a share of GDP for the Australian government as well as the states and territories, even after the sizeable stimulus being implemented,” he said.
And without that sizeable stimulus?
“The Australian economy would be much weaker with the consequent economic and social damage,” he said. “This would have materially worsened the fiscal position.
“I don’t see there is a trade-off between fiscal sustainability and fiscal support in the current circumstance. The cost of borrowing is at historically low levels for Australian governments. Borrowing costs are likely to remain very low for quite some time, and almost certainly until the economy is considerably stronger.
“This means that the debt dynamics for the Australian government and the states and territories are absolutely sustainable.”
The RBA’s warning on stimulus follows Treasury’s advice to the government in July to tread carefully in altering the rate of stimulus provided through the unemployment benefit jobseeker and jobkeeper.
Since then, the government has lowered the rate of support in both, with jobkeeper to expire in March, and the Covid supplement for jobseeker to be cut to just $150 a fortnight from January.
Debelle’s speech followed the RBA boss, Philip Lowe, earlier this month confirming a shift in Australia’s monetary policy, moving from a focus on inflation to a focus on full employment.
In Australia, full employment has largely meant a 5% unemployment rate. Debelle said ongoing stimulus, combined with monetary policy stimulus through the RBA’s bond purchases, would not only boost spending in the economy, it would boost employment and “in time, reduce unemployment”.
“A materially lower unemployment rate is clearly desirable in itself, but will also be necessary before we will see sustainably higher wages growth and inflation,” he said.
Sen. Bernie Sanders, I-Vt., renewed his calls for $2,000 monthly stimulus payments on Saturday, called for $600-a-month unemployment payments and slammed what he described as a “do-nothing Senate” amid stalled negotiations over a relief package.
“The American people can’t afford to wait any longer,” the self-described Democratic socialist said in a tweet.
AOC: ‘WE NEED TO PAY PEOPLE TO STAY HOME’ TO GET CORONAVIRUS UNDER CONTROL
“Every working class American needs $2,000 a month. Every unemployed American needs $600 a week. Every American needs healthcare as a human right. No one in America should go hungry or homeless,” he said. “The do-nothing Senate must act.”
Sanders has called for such payments before. In May, he called for $2,000 a month payments alongside now-Vice President-elect Kamala Harris and Ed Markey, D-Mass. He argued the one-time payment of $1,200 provided in the previous coronavirus legislation, known as the CARES Act, didn’t go far enough to help families reeling from the coronavirus crisis.
The three senators introduced the Monthly Economic Crisis Support Act to provide a $2,000 monthly check to every individual with an income below $120,000 throughout the pandemic and for three months once it concludes.
Lawmakers in Congress have been negotiating a new stimulus package, but have so far not managed to come to an agreement that would pass both chambers and President Trump. It is unclear to what extent the dynamics will change when President-elect Joe Biden is inaugurated.
AOC BLASTS TRUMP ADVISER FOR SUGGESTING MORE COVID RELIEF NOT NEEDED
It’s the latest call for major relief from the left-flank of the Democratic Party.
Rep. Alexandria Ocasio-Cortez, D-N.Y., said Thursday that the U.S. “pay people to stay home” to curb the spread of coronavirus. That came a day after the freshman congresswoman knocked Republicans for failing to reach a consensus with Democrats on coronavirus relief.
CLICK HERE TO GET THE FOX NEWS APP
“30 million people in this country are at risk of eviction. Millions of people are unemployed or underemployed from cut-back hours,” she said. “The economy is not the stock market. We are NOT doing fine. People need help in red states and blue, & our job is to help everyone. This is basic.”
Fellow “Squad” member Rep. Ilhan Omar, D-Minn., had another suggestion: “We need to send every American a check until this crisis is over.”
Fox News’ Morgan Phillips and Marisa Schultz contributed to this report.
The vaccine news and better-than-expected U.S. jobs growth in October are “encouraging” developments for the world’s largest economy — but that doesn’t reduce the need for further economic stimulus, said Carl Tannenbaum, chief economist at Northern Trust.
“On the employment front, we still have 10 million Americans that were working in January that are not working today. And those that remain unemployed are seeing a much longer track back to full employment, so they will continue to need a certain amount of support,” he told CNBC’s “Squawk Box Asia.”
“And the other element that I think is a headwind here in the United States … is state and local governments whose budgets are in terrible disarray at the moment for loss of revenue, they’re laying people off, cutting services and that’s bad for economic activity.”
… I think our recovery here in the United States, which is already losing momentum, could be at some risk if we’re waiting for a vaccine to solve all of our problems.
chief economist, Northern Trust
That’s why the U.S. can’t depend on a vaccine to “solve all our problems,” said Tannenbaum. He explained that even if the Covid-19 vaccine by Pfizer and BioNTech is “optimistically” approved this year, there may not be enough doses through 2021 to immunize those who need it.
But the economist said the U.S. is not likely to get an economic relief package before the presidential inauguration in January, given deep divisions in Congress. Negotiations for a stimulus deal hit a stalemate before last week’s election, with Democrats and Republicans failing to agree on the size and scale of a package.
“As a result, I think our recovery here in the United States, which is already losing momentum, could be at some risk if we’re waiting for a vaccine to solve all of our problems,” said Tannenbaum.
The business community and other economists have similarly said the U.S. economy needs further support as soon as possible.
FILE PHOTO: Japanese Prime Minister Yoshihide Suga enters the hall for the opening of an extraordinary session in Tokyo, Japan October 26, 2020. REUTERS/Kim Kyung-Hoon
November 10, 2020
By Yoshifumi Takemoto and Daniel Leussink
TOKYO (Reuters) – Japanese Prime Minister Yoshihide Suga instructed his cabinet on Tuesday to compile a package of stimulus measures to revitalise an economy hit by the coronavirus pandemic, the country’s economy minister said.
The package aims to cushion the blow from COVID-19, assist structural changes in the economy and boost productivity through digitalisation, Economy Minister Yasutoshi Nishimura told a news conference after a regular cabinet meeting.
“We’ll want to consider government spending that will attract private investment,” Nishimura said, adding the government will compile the package as soon as possible.
Japan’s economy is expected to have rebounded in the third quarter after posting a record postwar contraction in the preceding three-month period, when a nationwide state of emergency over the pandemic paralysed economic activity.
Stronger exports and output thanks to a pickup in overseas demand have helped the recovery, but weak capital investment and household spending have kept policymakers under pressure to further boost fiscal and monetary support.
“The pace of economic recovery is limited globally,” said Yasunari Ueno, chief market economist at Mizuho Securities.
“There’s no choice but to balance the prevention of the virus and economic growth.”
Nishimura said the stimulus measures will focus on shifting to a “green” society, after the government pledged to cut greenhouse gases to zero by 2050 and realise a carbon-neutral society.
While Nishimura said the size of the new package had not been decided, ruling party lawmakers have called for between 10 trillion yen and 30 trillion yen ($95 billion to $286 billion) in new measures.
Nishimura highlighted the country’s negative output gap – which occurs when actual output is less than the economy’s full capacity – saying it stood at about 55 trillion yen, in second quarter.
Japan has already deployed a combined $2.2 trillion in two stimulus packages in response to the health crisis, including cash payments to households and small business loans.
However, some analysts worry lavish spending could further strain the nation’s public finances, which are already the industrial world’s heaviest at more than twice the size of Japan’s $4.6 trillion economy.
“The additional budget should be spent on selected areas where necessary, rather than cash handouts to everyone that the government did previously,” said Yusuke Shimoda, senior economist at Japan Research Institute.
($1 = 104.8800 yen)
(Reporting by Yoshifumi Takemoto and Daniel Leussink, additional reporting by Leika Kihara and Kaori Kaneko; Editing by Chang-Ran Kim, Richard Pullin and Lincoln Feast.)
The State Government says it will double its coronavirus economic stimulus package to $4 billion in this week’s state Budget to support the South Australian economy through the pandemic, but the Opposition wants more money spent on the health system.
The SA Government says the extra funding will take the total worth of coronavirus stimulus measures to $5 billion
The Premier says it represents the “single biggest” stimulus injection in the state’s history
The Opposition wants Budget money allocated to the health system
Premier Steven Marshall said this week’s Budget would include new measures and also extend existing programs designed to create jobs in the next two years.
“We want to stand up as many jobs as we can.”
He said it was the “single biggest” stimulus injection in the state’s history and would take the total amount of coronavirus stimulus measures to $5 billion.
The Liberal Government announced $1 billion in economic measures to support industries hardest hit by the pandemic earlier this year.
The Opposition was critical when the Government raised that figure to $2 billion, after it included business and land tax relief measures.
Money for trades, sports clubs and business
A major part of the package is an almost $1 billion scheme to support those in building trades, with a number of construction projects also expected to be outlined. They include the plans for the final stage of the North-South Corridor.
The previously announced $300 million business and jobs support fund — designed to support and protect individual businesses and sectors at risk of collapse — will receive a further $230 million.
The $250 million community support fund will receive a further $15 million to support smaller organisations such as sporting, arts and not-for-profit organisations.
The State Government said a further $1 billion would be secured through the Commonwealth, business and local government networks.
A further $35 million will be allocated for the expansion of grassroots netball, football and cricket clubs.
The program will be extended to include all sports in both regional and metropolitan areas over the next two financial years.
Sports Minister Corey Wingard said it would create jobs and support local communities.
“That is a really big boost and a really big injection,” Mr Wingard said.
Labor said much of the funding had arrived too late and it called on the Government to outline detailed plans for major infrastructure projects and new events to replace the Adelaide 500 and Tour Down Under next year.
“Steven Marshall hasn’t even spent the COVID stimulus he announced way back in March, and all the while South Australia has lagged behind all other states,” Shadow Treasurer Stephen Mulligan said.
“There’s more than 165,000 South Australians looking for work right now. There’s many businesses struggling to make ends meet right now: They need this stimulus spent right now.
“We welcome Steven Marshall finally heeding our repeated calls for more stimulus, but this announcement means nothing unless this money is actually spent.”
Opposition calls for health investment
The Opposition said this year’s Budget needed to address issues of ambulance ramping and invest in the health system.
Shadow Health Minister Chris Picton said there were days in the past week when ambulances were not available to treat patients in need.
“If we don’t have ambulances to treat people in the community, that means people are waiting much longer than they should to get emergency assistance,” Mr Picton said.
He said data released this week showed 93 calls to triple-0 that were not answered by operators.
“The Government needs to step in this week and invest to ensure the situation doesn’t go from bad to worse.”
Mr Marshall did not say whether money would be allocated in the Budget to address these issues in the health system.
He said significant government investment had already seen ramping pressures ease.
“There’s been a 26 per cent year-on-year drop [in ramping],” he said.
He said that with interest rates now already down to zero “the states and territories can also play an important role in supporting the economic recovery, especially in the areas where they have primary responsibility and are better placed to design and implement policy, including social and other infrastructure”.
Australia’s economy is doing better than expected, thanks in part to our success so far in controlling the pandemic. Perhaps two-thirds of the jobs lost during the shutdowns in April and May have now been recovered. The Reserve Bank of Australia says unemployment will peak at 8 per cent rather than the 10 per cent as predicted six months ago.
But the central bank has warned that a recovery will be slow and said the high rate of unemployment should be a national priority. Unemployment in NSW surprisingly jumped 0.5 percentage points to 7.2 per cent in September.
Mr Perrottet will, of course, be concerned about the impact of further stimulus on the already-stretched state budget. Mr Perrottet said last month that the recession would reduce the state’s revenue by about $24 billion over five years.
Credit rating agencies are sounding the alarm about debt levels and have put Victoria’s AAA rating on watch for a downgrade.
But it is still too soon to return to the fiscally constrained path Mr Perrottet had rightly preferred prior to announcing the state’s first round of stimulus.
Mr Morrison is right that NSW has plenty of capacity to borrow, especially as the RBA guaranteed this week to intervene in the markets to keep state borrowing costs low. The ratings agencies are irrelevant.
The state government should announce stimulus measures which create jobs quickly. A few programs, such as $150 million to install LED globes in school buildings, have already been flagged but more is needed. Councils want billions spent on local road infrastructure and social housing.
The hospitality industry has endorsed proposals for sending all NSW residents time-limited vouchers to pay for restaurants and hotels to get people spending quickly.
Mr Perrottet also announced on Friday he wants to sell the 49 per cent stake NSW still has of the partially constructed Westconnex Motorway. The Treasurer also announced a change in wages policy which will keep pay rises for state workers at below 1.5 per cent each year rather than the 2.5 per cent limit that has applied for the past decade.
The sale of Westconnex makes sense but the timing must not be rushed. Selling when future revenues from road tolls are so uncertain will make it harder to get a good price.
The wage policy is a retreat from his earlier attempt to suspend any wage rises, which was blocked by the upper house earlier this year and roughly in line with inflation, which is forecast to be very low. Moreover, Mr Perrottet should use any savings on wages to finance other forms of stimulus.
The Herald hopes the state budget on November 17, like the federal budget last month, targets its stimulus spending to where it is needed most. At least until the unemployment rate shows signs of stabilising and falling.
The Herald editor Lisa Davies writes a weekly newsletter exclusively for subscribers. To have it delivered to your inbox, please sign up here.
Since the Herald was first published in 1831, the editorial team has believed it important to express a considered view on the issues of the day for readers, always putting the public interest first. Elsewhere, we strive to cover a diversity of views without endorsing any of them.
Election day is a mere four days away, and the good people in Washington have failed to pass a stimulus bill for coronavirus relief. In fact, they can’t even agree on what a stimulus package might include. With no hope for a pre-election deal, here’s the latest update on how things might play out after November 3.
What’s the soonest I could receive a stimulus check or unemployment?
Confident that former Vice President Joe Biden will win the election, House Speaker Nancy Pelosi said yesterday that she is committed to passing a stimulus package during the lame duck session, which is after the election but before the new Congress begins. Her ability to do so depends on the outcome of the election—and the extent to which President Trump cooperates. We see three likely outcomes:
If Democrats sweep: An enormous stimulus bill would likely pass in late January, just following Inauguration Day (January 20). If Democrats know they can provide the large-scale aid bill they want in January, it would make little sense for them to compromise heavily in November or December to push a bill through the Republican-controlled Senate.
If Republicans keep control of the Senate: Majority Leader Mitch McConnell holds the power here. Both sides would be under extreme public pressure to pass a stimulus bill during the lame duck period, which may or may not happen. If McConnell seems to be marshaling his troops soon after the election, then it will happen. If not, then negotiations will continue into the new administration.
It’s mid-November, and no stimulus bill has appeared: Given that all sides generally agree on another round stimulus checks and extended federal unemployment benefits, it would not be surprising if checks and unemployment (or both), or other aid measures, were tucked into the upcoming funding bill that will prevent government shutdown on December 11.
Trump loses the White House: The wild card here is President Trump, who this week promised “the best stimulus bill you’ve ever seen” post-election. Would he keep that promise after losing an election? We’ll leave you to speculate on his sign-vs.-veto behavior following a massive narcissistic injury as crucial economic relief for millions of Americans hangs in the balance.
Why the hell didn’t Congress pass a bill before Election Day?
McConnell’s wish that the White House not actually agree to terms of the stimulus package before Election Day seems to have been honored. On Thursday, Pelosi sent a letter to Treasury Secretary Steve Mnuchin—and the media—claiming that Mnuchin had not responded to compromise language on a number of topics relating to COVID-19 response and health insurance coverage, and indicating continued disagreements on a half dozen separate funding topics. Mnuchin was miffed to read the letter in the media, and turned the blame right back at her and her “all or none” approach.
Fresh lockdowns for outbreak-stricken parts of Europe raise the prospect of a stimulus surprise from the European Central Bank; here’s the ECB decision day guideThe Bank of Japan on Thursday cut its growth forecast for the current year while keeping its key interest rates and asset purchases unchanged amid high virus uncertaintyThe U.S. is sowing turmoil at the World Trade Organization with its veto of the front-runner for the top postThe G-20 plans to hold an extraordinary meeting to discuss debt relief on Nov. 13The Bank of Canada pared back bond purchases and reinforced its commitment to keep interest rates at historical lows; Brazil kept its low-rate guidance as markets see inflation riskThe U.S. goods-trade gap unexpectedly narrowed on a drop in imports In this week’s Stephanomics podcast, Bloomberg renewables reporter Jess Shankleman reports from London and Host Stephanie Flanders talks with economist and policymaker Lord Nicholas Stern about how he thinks addressing climate change can be a sustainable route to growth
Companies that get COVID-19 support payments such as the JobKeeper wage subsidy while still paying executive bonuses or increasing dividends risk damage to their reputations, the Australian Taxation Office (ATO) has warned.
ATO second commissioner Jeremy Hirschhorn says companies need to take account of reputational risk in the way they behave
Mr Hirschhorn also warned against businesses exploiting Federal Budget measures designed to encourage investment, such as the loss carry-back scheme
The warning comes amid concerns stimulus measures could be rorted and that companies receiving JobKeeper payments are still paying executive bonuses
“There was nothing explicit in the rules for the stimulus measures that required companies to stop paying executive bonuses or from increasing dividends to shareholders, but there was a quick backlash for those companies seen to be exploiting the spirit of the measures,” ATO second commissioner Jeremy Hirschhorn said.
He told finance chiefs at The Australian Financial Review CFO Live conference on Thursday that they needed to “follow the tax law, but also follow the spirit of the law”.
The warning comes after a number of ASX-listed companies were found to have received the JobKeeper wage subsidies and general concerns that executives will walk away with cash handouts despite promises to not pay bonuses during the pandemic.
Australia’s highest-paid civil servant, Australia Post chief executive Christine Holgate, remains eligible for a $277,000 cash reward despite her job and future hanging under a cloud.
Ms Holgate, who is fighting to keep her position at Australia Post after it was revealed she spent nearly $20,000 on luxury watches for executives who secured a financial services deal with a major bank, had in March said executives would “forsake any right to a bonus payment”.
But it is possible Ms Holgate will still be granted the bonus because of a deferred incentive payment from last financial year, which would amount to almost 19 per cent of her fixed salary of about $1.5 million.
Mr Hirschhorn did not comment on specific chief executives. But he said his view that companies should not pay bonuses when they are receiving taxpayer support through the pandemic, is consistent with messages from business and investor groups.
Business Council of Australia chief Jennifer Westacott and shareholder activist group Ownership Matters have been among those warning against bonuses being paid in these circumstances.
Mr Hirschhorn said the community would have little sympathy for companies seen to be wasting taxpayer funds and exploiting tax loopholes.
“The line ‘we follow the tax laws in every country in which we operate’ will play even less well when aggressive tax behaviour spills into the public domain, particularly in times of budget deficit,” he added.
Loss carry-back is for businesses doing it tough, not rorters
Mr Hirschhorn also warned against businesses exploiting more recent measures introduced in the Federal Budget to encourage businesses to invest.
These include allowing full expensing of plant and equipment and bringing forward the ability for businesses to carry back losses during this pandemic disaster year against last year’s profits.
“Invest in new plant, upgrade your facilities, claim a tax offset and reinvest the money in your business and jobs.
“But I would suggest thinking twice before entering into artificial mechanisms to take advantage of these measures, for example, structured transactions where the plant and equipment is not actually used in your business, intellectual property migration with no change in real activity; asset swaps with related parties.
“Similarly, accessing the loss carry-back to support executive bonuses, increased dividends or to repatriate cash to offshore-related parties is likely to be viewed poorly by the community.”
He told finance chiefs a wise tax adviser was one that could also see the reputational damage from engaging in aggressive tax behaviour, rather than one who devised tricks to avoid tax.
“Your alarm bells should ring loudest when the ‘clever’ adviser tells you that your tax manager is too conservative,” he said.
“Or particularly dangerous, they bring a tax-driven transaction to you supported by a suite of potential commercial rationales for the transaction.”