Banks are preparing for a RECESSION for the first time in decades amid coronavirus panic - as the government prepares to chip in for wages to prevent job losses

  • Economists at Australia's big four banks forecasting March quarter contraction
  • A negative result in the June quarter would herald the first recession since 1991 
  • Prime Minister Scott Morrison refused to rule out a recession in parliament 
  • Treasurer Josh Frydenberg's stimulus package could have wage subsidies
  • ANZ head of economics David Plank said it could get 'very negative' soon 

The big four banks are preparing for Australia to sink into a recession for the first time in 29 years as coronavirus fears stop consumers from going out.

Gross domestic product last year grew by 2.2 per cent - a level well below the long-term average of 3.2 per cent since the last recession in 1991.

Now, economists at the Commonwealth Bank, Westpac, ANZ and NAB are forecasting the economy will contract in the March quarter, following growth of just 0.5 per cent during the December quarter.

A contraction again in the June quarter would herald the first technical recession in 29 years.

Credit ratings agency Standard and Poor's is also forecasting Australia will 'enter or flirt with recession', sparking a 1.7 per cent plunge on the Australian share market in early Friday trade. 

Treasurer Josh Frydenberg is expected to unveil a multi-billion dollar stimulus package in coming days to ward off a major economic downturn.

His spokesman addressed speculation the measures could include wage subsidies for small and medium businesses to stop them from retrenching staff as consumers stay home.

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The big four banks are preparing for Australia to possibly sink into a recession for the first time in 29 years as coronavirus fears stop consumers from going out. Pictured is Myer's Hornsby store in Sydney's north closing down in January after 40 years

The big four banks are preparing for Australia to possibly sink into a recession for the first time in 29 years as coronavirus fears stop consumers from going out. Pictured is Myer's Hornsby store in Sydney's north closing down in January after 40 years 

'We will be putting out a fiscal response and the Prime Minister has foreshadowed that, the focus will be on cash flow, investment and jobs,' he told Daily Mail Australia on Friday.

ANZ head of economics David Plank is forecasting a contraction in the March quarter and feared the June quarter could be 'very negative' as a result of coronavirus.

'In the worst case scenario, all the schools are shut, nobody's going to work, the cities shut down - we've seen what happens in China,' he told Daily Mail Australia.

'The real question is really more about how long does it extend for and how bad does it get into the middle of the year? The level of uncertainty is enormous.' 

Treasury secretary Steven Kennedy this week told a Senate estimates hearing coronavirus was likely to subtract 0.5 per cent from Australia's gross domestic product in the March quarter, with more than 60 Australians now infected and two killed.

Treasurer Josh Frydenberg (right, with Prime Minister Scott Morrison left) is expected to unveil a multi-billion dollar stimulus package in coming days to ward off a major economic downturn

Treasurer Josh Frydenberg (right, with Prime Minister Scott Morrison left) is expected to unveil a multi-billion dollar stimulus package in coming days to ward off a major economic downturn

Prime Minister Scott Morrison also refused to guarantee Australia would avoid a recession when Opposition Leader Anthony Albanese pushed him on the issue yesterday.

'I can guarantee to the Australian people that they will get the strong economic management they voted for,' Mr Morrison told parliamentary Question Time.

Mr Morrison won the last election promising his Coalition government would deliver a surplus in 2020, which would have been the first in 13 years.

The pre-election April budget promised a surplus of $7.1billion for 2019-20 but by December, Treasury's Mid-Year Economic and Fiscal Outlook forecast that would shrink to $5billion.

Those negative predictions were made before the summer bushfires intensified and China confirmed the first cases of coronavirus in the city of Wuhan.

The Treasurer's spokesman hinted the stimulus package would include measures to support jobs, amid speculation it will include wage subsidies (stock image)

The Treasurer's spokesman hinted the stimulus package would include measures to support jobs, amid speculation it will include wage subsidies (stock image)

Mr Plank said a fall in demand had already wiped out the promised surplus and said a $3-$5billion stimulus package was needed in coming days.

'We should probably prepare on the basis that things will get worse and then hope that they don't,' he said.

'The whole point about the stimulus package, in many ways, is not so much the numbers themselves, it's about getting the clear signal to business that help is on its way and that help will be ramped up if needed.

'The focus has to be on making sure businesses can keep employing their staff and they're not forced to shut because demand has collapsed.' 

The Reserve Bank of Australia this week cut interest rates to a record-low of 0.5 per cent, blaming COVID-19 for its decision.

The cash rate is just two cuts away from being at zero. 

ANZ head of economics David Plank is forecasting a contraction in the March quarter and feared the June quarter could be 'very negative' as a result of coronavirus. Pictured are empty toilet roll shelves at a Woolworths supermarket in Melbourne

ANZ head of economics David Plank is forecasting a contraction in the March quarter and feared the June quarter could be 'very negative' as a result of coronavirus. Pictured are empty toilet roll shelves at a Woolworths supermarket in Melbourne

CORONAVIRUS CASES IN AUSTRALIA CLIMB TO 63

NEW SOUTH WALES: 28

January 25 

Three men aged 43, 53, and 35 who had recently travelled to China contracted the disease.

Two flew in from Wuhan while the other arrived in Sydney from Shenzhen, south China.

They were treated in isolation at Westmead Hospital. 

January 27  

A 21-year-old woman is identified as the fourth person to test positive for the illness in NSW.

The woman, a student at UNSW, flew into Sydney International Airport on flight MU749 on January 23 and presented to the emergency department 24 hours later after developing flu-like symptoms.

March 1 

A man in his 40s is confirmed as the fifth coronavirus case in the state and a woman in her 50s as the sixth. Both returned to Sydney from Iran. 

March 2 

The 41-year-old sister of a man who had returned from Iran with the disease was one of three confirmed cases. The second locally-acquired case was a 53-year-old male health worker who hadn't travelled for many months.

The other new case is a 31-year-old man who flew into Sydney on Saturday from Iran and developed symptoms 24 hours later.

March 3

Six more cases are confirmed in NSW. They included a 39-year-old man who had flown in from Iran and a 53-year-old man who arrived from Singapore last Friday.

It also included two women aged in their 60s who arrived in Sydney from South Korea and Japan respectively.

A man in his 30s who returned from Malaysia to Sydney on Malindo Air flight OD171 on March 1 was also one of the six.

A 50-year-old carer was the final of the day's six people diagnosed with coronavirus. The woman is a carer at a nursing home in Macquarie Park in Sydney's north. She had not been overseas and contracted the virus in Australia. 

March 4

A 95-year-old woman died at a Sydney hospital on Wednesday night after developing a respiratory illness from the coronavirus, bringing the death toll to two.

A Macquarie University lecturer tested positive for coronavirus on Wednesday after returning from Iran. 

A further six cases confirmed on Wednesday evening. They included an 82-year-old aged care resident from the Dorothy Henderson Lodge, where the 95-year-old woman was staying.

The new cases include a female doctor who works at Liverpool hospital, a female patient from the Northern Beaches, a male from Cronulla, a woman who returned from the Phillippines and a woman in her 70s. 

March 5

A health care worker, who attended the same conference as the doctor from Ryde Hospital, also tests positive.

A boy from Epping Boys High School is diagnosed with COVID-19 forcing the school to temporarily close.

A Goulburn resident who had recently returned from Singapore and travelled on to Darwin was also diagnosed with the virus 

A fourth resident, aged 94, from the Dorothy Henderson Lodge aged care facility in Macquarie Park was also diagnosed

March 6

Two more workers at the Dorothy Henderson Lodge aged care centre are diagnosed with coronavirus 

 A 24-year-old female and 21-year-old male have now been confirmed as cases at the facility

An 18-year-old female has also been diagnosed

 VICTORIA: 10

January 25  

A Chinese national aged in his 50s becomes the first confirmed case of the coronavirus in Australia.

The man flew to Melbourne on China Southern flight CZ321 from Wuhan via Guangzhou on January 19.

He was quarantined at Monash Hospital in Clayton in Melbourne's east.

January 29   

A Victorian man in his 60s is diagnosed with the coronavirus.

He became unwell on January 23 - two days after returning from the Chinese city of Wuhan, the epicentre of the outbreak.

The man was confirmed as positive on January 29 and was subsequently seen by doctors at the Monash Medical Centre.

January 30 

 A woman in her 40s is found to have coronavirus.

She was visiting from China and mostly spent time with her family.

She is being treated at Royal Melbourne Hospital. 

February 1 

A woman in her 20s in Melbourne is found to have the virus. 

February 22

Two passengers taken off the Diamond Princess cruise ship test positive. 

February 25

Another passenger taken off the cruise ship tests positive. 

March 1

Victorian man confirmed to have coronavirus after the 78-year-old was evacuated to Melbourne from a Darwin quarantine centre.

It is confirmed a Victorian woman in her 30s has tested positive for coronavirus after flying from Malaysia to Melbourne via Indonesia.

March 4

Victorian man in his 30s confirmed to have coronavirus after returning from Iran. Health Minister Jenny Mikakos said the man was 'almost symptom-free' after self-isolating 

QUEENSLAND: 13

January 29

Queensland confirms its first case after a 44-year-old Chinese national was diagnosed with the virus. He is being treated at Gold Coast University Hospital.

January 30

A 42-year-old Chinese woman who was travelling in the same Wuhan tour group as the 44-year-old man tests positive. She is in Gold Coast University Hospital in stable condition.

February 4

An eight-year-old boy was diagnosed with coronavirus. He is also from the tour group where the other Queensland cases came from.

February 5

A 37-year-old man, who was a member of a group of nine Chinese tourists in quarantine on the Gold Coast, also tested positive.

February 6  

A 37-year-old woman was diagnosed with coronavirus from the same travel group that flew to Queensland from Melbourne on January 27.

February 21 

Two Queensland women, aged 54 and 55, tested positive for COVID-19 and will be flown to Brisbane for further treatment.

A 57-year-old woman from Queensland also tested positive for the virus.

February 28

A 63-year-old woman was confirmed to have the virus after returning to the Gold Coast from Iran.

March 3

A 20-year-old man from China was confirmed as the tenth person to be infected by the coronavirus in Queensland. The man had travelled to Dubai for at least 14 days before entering Australia, via Brisbane on February 23. 

March 4

A 26-year-old man from Logan in Brisbane is diagnosed with coronavirus. He arrived back in Australia from Iran.

March 5 

An 81-year-old man who had returned to Brisbane from Thailand and a 29-year-old woman who had come via Singapore from London are diagnosed with coronavirus.

SOUTH AUSTRALIA: 7

February 1  

A Chinese couple in their 60s who arrived in Adelaide from Wuhan to visit relatives are confirmed to have coronavirus.

A 24-year-old woman from South Australia was transferred to Royal Adelaide Hospital.

March 4

Mother, 40, is diagnosed after flying to Australia from Iran via Kuala Lumpur. 

Another 24-year-old woman, not related to the previous woman, was in a stable condition in Adelaide hospital after falling ill following overseas travel.

March 5

The eight-month-old child of the 40-year-woman, diagnosed on March 4, is also diagnosed with coronavirus.

Renowned Australian music composer Brett Dean, 58, who travelled to SA on March 3 from Taiwan also tests positive. He's receiving treatment in an Adelaide hospital.

WESTERN AUSTRALIA: 3

February 21 

A 78-year-old man from Western Australia was transferred to Sir Charles Gairdner Hospital in Perth. On February 28, he was taken into intensive care in a 'serious' condition and later died. His wife was also diagnosed with coronavirus.

March 1 

The elderly man died in the early hours of the morning from the virus at Sir Charles Gairdner Hospital.

March 5

A woman in Perth is diagnosed with the virus after flying into the city from the UK, via Dubai 

TASMANIA: 1  

March 2

The man who travelled from Iran to Australia on Saturday tested positive for COVID-19.

NORTHERN TERRITORY: 1 

March 4

A tourist in Darwin has tested positive for coronavirus in what is the first confirmed case in the Northern Territory.

NT Health confirmed the 52-year-old man as the first case of COVID-19 in the community on Wednesday evening. 

The man recently arrived in Darwin via Sydney and has had limited contact with the local community, NT Health said in a statement. 

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Big four banks prepare for coronavirus to cause first Australian recession in 29 years in 2020

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