The Australian federal government only just finished the last $17.6 billion stimulus package and now they seem to be working on another package.
According to reporting by the Australian Financial Review, this new package will look to support businesses and households. This isn't necessarily about stimulating the economy.
The idea is that the industries and individuals that have been most affected by the quarantine measures will be assisted. Airlines could be one of the industries that need help. The earnings and flight numbers of Qantas Airways Limited (ASX: QAN) and Virgin Australia Holdings Ltd (ASX: VAH) have been heavily impacted. Labor has suggested support for the airlines would be a good idea.
The AFR understands that measures being considered include an extension of what was announced last week as well as new measures to help the economy.
Why the rush?
The government was thinking that it would be able to wait until the budget in May to announce the new measures, but now it seems it has to step in much earlier than expected.
Perhaps that's not good news for the economy, maybe it's worse than expected. Or maybe the government is just trying to get ahead of the problem now, before it becomes too serious.
Investors are seriously concerned about how hard the economy is being hit, which is why bank shares are falling so hard.
Today we saw:
The Commonwealth Bank of Australia (ASX: CBA) share price fell 10.1%.
The Westpac Banking Corp (ASX: WBC) share price dropped 11.8%.
The National Australia Bank Ltd (ASX: NAB) share price declined by 12.4%.
The Australia and New Zealand Banking Group (ASX: ANZ) share price dropped 12.5%.
Painful times. It's important for the banks and the whole economy to function as normally as possible, or else there could be a painful knock-on effect.
