Australia PM says reopening of internal borders supports jobs, pledges more stimulus

A Covid-19 sign on the Queensland-New South Wales state border, on April 15, 2020. PHOTO: AFP

SYDNEY (REUTERS) - Australian Prime Minister Scott Morrison said on Monday (June 29) the reopening of state borders will support jobs growth despite a fresh outbreak of the coronavirus in the country's second most populated state.

South Australia and Tasmania states have in recent days confirmed their borders will reopen in late July. Queensland state expected to announce similar later on Monday.

"There's no reason we can't go ahead with these openings," Morrison told 2GB radio. "They should go ahead - it's costing jobs in those states."

Australia has been relatively successful in containing the spread of the novel coronavirus with total cases of around 7,700, including 104 deaths.

However, a recent spike in infections in Victoria state has threatened plans to remove the bulk of the country's social distancing restrictions by the end of July. Victoria's borders, shared with New South Wales and South Australia states, are open, stoking fears the infection could spread during upcoming winter school holidays.

Morrison also pledged more economic stimulus as Australia slides into its first recession in 30 years and the unemployment rate has hit a 19-year high of 7.1 per cent.

However, he ruled out a blanket extension of a A$60 billion (S$57.3 billion) wage subsidy scheme beyond its scheduled end in September, hinting instead it would be replaced by targeted fiscal support.

"It can't be sustained forever," Morrison said, adding that another phase of stimulus at the end of September would be targeted "to the people who need it most".

The Grattan Institute, a well-regarded independent think tank, said in a report published on Monday the government needs to inject up to A$90 billion more in stimulus programs, including extending its wage subsidy program.

That stimulus was needed before the annual budget in October to bring the unemployment rate down to about 5 per cent by the middle of 2022, the report said.

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