Covid-19 News Updates

China releases industrial output and retail sales update

China's National Bureau of Statistics has revealed the extent of the economic impacts of Covid-19 in the first two months of the year, with big drops for manufacturing and retail consumption in particular.

The total value added for industrial enterprises with annual revenue above AUD$4.6 million fell by 13.5 per cent year-on-year, with the decline more pronounced for private companies than for state-owned enterprises.

"In terms of sectors, the value added of mining went down by 6.5 per cent, manufacturing down by 15.7 per cent and the production and supply of electricity, thermal power, gas and water down by 7.1 per cent," the bureau reports.

"An analysis by items and output showed that protective medical equipment and products concerning people's livelihood registered fast growth.

"The production of masks, fermented alcohol grew by 127.5 percent and 15.6 percent respectively, and that for frozen meat and instant noodles grew by 13.5 percent and 11.4 percent respectively."

Strong momentum was seen for high-tech products with steady growth for smart watches, smart bands, semiconductor discrete devices and integrated circuits.

The production of basic raw materials such as cast iron and crude steel was steady as well, while a survey of purchasing managers an 85.6 per cent resumption rate for large and medium-sized businesses.

"Production and business operation are being restored in an orderly manner," the bureau states.

In terms of retail, 5.2 billion yuan (AUD$1.2 billion) worth of consumer goods were sold in January and February, representing a year-on-year decline of 20.5 per cent.

Updated at 5:52pm AEDT on 16 March 2020.

PM recommends avoiding mass gatherings, but not until Monday

Prime Minister Scott Morrison has advised Australians to take precautionary measures by advising against attending mass gatherings from Monday.

The PM says the Government advises against organised, non-essential gatherings of 500 people or greater.

By non-essential gatherings the PM is not referring to places like university, school or airports.

Ultimately, the advice is just a recommendation, which Morrison describes as a "scalable response".

"These are things that will be scaled up in the weeks ahead," says Morrison.

"Parliament is essential, school is essential, going to work is essential."

The PM has also urged Australians to reconsider the need to travel overseas at this time, irrespective of location.

"Only essential travel should be considered if you're going overseas from this point forward," says Morrison.

Fox Sports reports NRL clubs are due to hold a call at 4pm AEDT to prepare for a potential shutdown.

NRL CEO Todd Greenberg has confirmed the Brisbane Broncos vs North Queensland Cowboys will still go ahead tonight, and the Canberra Raiders vs Gold Coast Titans will also proceed as planned.

The AFL is also due to start next weekend, but the league now says "there's a lot up in the air".

"A decision on whether games will be played in front of no fans or whether the season will be postponed has not been made yet," the AFL said in its latest update.

Despite a broad share market fall this morning, the All Ordinaries rebounded after the Prime Minister's press conference and is now up 4 per cent.

Updated 3.30pm AEDT on 13 March 2020.

Filming of Baz Luhrmann's Elvis biopic and Marvel movie postponed indefinitely

Staff working on Baz Luhrmann's film about Elvis have been given one week of severance pay after the Covid-19 threat led producers to postpone the project.

A source close to the production has told Business News Australia that filming was put on hold for two days after actor Tom Hanks tested positive to the virus, but they came back on the set at the start of this week.

For now Warner Bros has officially called off the Gold Coast-based production as the company believes it would be unable to protect staff safety, although it is hoped that filming will be able to recommence in August.

The film, so far untitled, will explore Elvis' rise to fame, his stardom, and his impact on the world of music.

The movie is also expected to explore Elvis' complex relationship with his manager Colonel Tom Parker, played by Tom Hanks.

The production alone is estimated to be employing around 900 Queenslanders in behind-the-scenes roles, including set construction, catering and transportation, and inject more than $105 million into the local economy.

Filming of another production, Marvel's 'Shang-Chi and the Legend of the Ten Rings', has also been cancelled.

Production was postponed after director Destin Daniel Cretton was advised to self-isolate and tested for Covid-19, which came back with a negative result.

The movie was being filmed at Fox Studios in Sydney.

Updated at 13:26pm AEDT on 20 March 2020.

CBA to auto-enroll loan repayment deferrals

After announcements from thee of the big four banks about how they would implement a six-month loan payment deferral for pandemic-affected businesses, the Commonwealth Bank of Australia (ASX: CBA) put forward an idea that could take a lot of rigmarole out of the process.

The bank's streamlined solution involves auto-enrolling tens of thousands of businesses in the scheme, ensuring immediate support for small businesses likely to be most impacted by the coronavirus.

"We welcome today's announcement by the Australian Banking Association (ABA), which benefits 200,000 of the bank's small business customers," says CEO Matt Comyn.

"To ensure immediate support, CBA will also auto-enrol 76,000 of its small business customers into loan deferral arrangements for up to six months from 1 April. This will ensure that $240 million of support immediately reaches small businesses who are most vulnerable in the current environment" he says.

"A digital registration process will be available from Saturday for any home loan customer wishing to defer their repayments. Unless the request for support is urgent, there is no need for customers to contact us before this time. We will also be communicating with our small business customers from next week and giving them the choice to opt out of the auto enrolment process."

Comyn says the ABA's loan deferral scheme will also include all customers with a home loan, therefore providing $10 billion in support to households and small businesses.

Updated at 6:50pm AEDT on 20 March 2020.

Air cargo networks in turmoil as international flights cancelled

Qantas and Virgin Australia's decision to cut international passenger flights will have a tremendous impact on Australia's air freight industry according to a coalition of independent global business associations.

While closing borders to international travellers and slashing flights en masse is expected to slow the spread of Covid-19 in Australia, the Global Business Coalition (GBC) says the global air freight sector will struggle to keep up with time-critical deliveries that rely on passenger flights.

Specifically the GBC says the deliveries of life-saving medical supplies, urgent repair components, and essential inputs into global supply chains will struggle to reach their destinations in a safe and timely manner as a result.

"Almost all of our airfreight space is under the feet of passengers. No passenger planes equals no freight space for often time-critical supplies," says chief executive of GBC member organisation Ai Group Innes Willox.

"Ai Group has joined with our international counterparts to call for Governments and companies to prioritize all available space for crucial medicines, medical equipment and supplies including vitally needed safety products such as gloves, masks and HAZMAT gear."

Willox says governments must take a pragmatic approach to not only air freight but cargo ships too.

GBC's plea follows heavy criticism against Maritime Safety Queensland (MSQ) from the peak shipping industry body Shipping Australia about the regulator's declaration that cargo ships cannot dock in Queensland for 14 days after leaving an international port outside of Australia.

Shipping Australia said the declaration will lead to shortages of goods for Queenslanders and could cut off vital trade routes. 

This morning the Queensland Minister for Transport and Main Roads Mark Bailey hit back at Shipping Australia, saying MSQ's decision prioritises the safety of Australians.

"Given the health threat our nation is facing, this is a tough but necessary policy and meets the community's expectations to tighten border control to contain COVID-19 to minimise the threat to our sea based trade from this virus," says Bailey.

"It reduces the potential for international seafarers who may be sick or carrying the virus to come into contact with local maritime workers while they may be contagious.

"Losing highly skilled marine pilots to infection, particularly at regional ports could have a catastrophic effect on trade at those ports over many months. The Australian economy can't afford that."

Despite the restrictions Bailey says cargo continues to move through Queensland ports efficiently and that bulk exports have been largely unaffected. 

"MSQ has promptly processed a number of exemptions to the measures where special circumstances can be demonstrated. Notably, where there is a need to maintain critical supply lines, for countries including New Zealand, Papua New Guinea and the South Pacific islands, and where risk is sufficiently managed, in line with Federal Health directives," says Bailey.

"Almost 2200 ships entered Queensland ports between 31 January, when MSQ first enacted restrictions from China then South Korea, and 18 March.

"To date, no cases of COVID-19 have been identified at our Queensland ports or affecting port workforces."

Updated at 4:21pm AEDT on 20 March 2020.

PM tightens indoor gathering restrictions, ups support for aged care, national budget postponed

Prime Minister Scott Morrison announced tougher restrictions to indoor gatherings during a press conference this afternoon as the Covid-19 situation worsens in Australia.

Indoor, non-essential gatherings will be restricted even further to four square meters per person in a room.

For example, in a room the size of 100 square meters only 25 people would be able to gather inside at any one time.

It comes in conjunction with a new stimulus package targeted at the aged care sector worth $444.6 million, adding to $100 million in funding already announced.

The package includes $234.9 million for retention bonuses, $78.3 million for residential care to support continuity of workforce supply, $26.9 million to supplement viability of residential aged care facilities, $92.2 million in additional support for home care providers like Meals on Wheels, and $12.3 million toward the My Aged Care service to respond to needs of older australians.

The PM has also advised all Australians to reconsider the need for unnecessary travel anywhere. 

Ultimately the messasge from the PM and the Chief Medical Officer Brendan Murphy was clear and simple: stay home, practice social distancing, and do not work if you are sick.

"It is your civic duty to your fellow Australians to stay home for that entire 14 days if you've come back to Australia," says Murphy.

"No exceptions."

Further, the national budget will be postponed until the sixth of October. The states are making similar arrangements to postpone their own budgets.

"Forecasting the budget is difficult at the best of times, let alone when we're in the midst of a global pandemic," says Federal Treasurer Josh Frydenberg.

"It's important that we are able to deliver a budget at a time when there is more certainty about the economic environment, and that is planned for the first Tuesday of October."

Schools around the country have been instructed to continue to stay open, but the PM does encourage holding classes remotely where possible or practicable. 

What is next on the PM's agenda?

In addition to the gathering restrictions, travel advice and the aged care support package the PM hinted at a number of changes that may be implemented in coming days.

Referring to the announcement made this morning by the Australian Banking Association that banks will defer loan repayments for all small businesses affected by Covid-19 for six months, the PM says landlords should expect to make similar sacrifices in the coming months.

"I want to particularly welcome the decision...that was made by the banks today which showed that they are pulling together with everyone else to ensure that we can get Australians through this," said the PM.

"States also agreed today, and further work will be done on this, working to identify how relief can be provided to tenants in both commercial tenancy and residential tennancies to ensure that in hardship conditions there will be relief that will be available."

"Now I know that will mean something for landlords...all Australians are going to be making sacrifices, and everyone does have that role to play, and that will include landlords at the end of the day for people who are enduring real hardship."

It also appears as if the Federal Government is working on a plan to deal with localised outbreaks of Covid-19 in specific communities.

Morrison says he is working with his medical expert panel on constructing a response plan to manage outbreaks that are localsed to specific communities of Australia.

No plans or details are set in place as of yet, but the PM says they are working on a scalable plan should a localised outbreak occur.  

The PM's announcement comes as the global death toll cracks 10,000, with 10,030 people having died from Covid-19. 244.517 people are now confirmed to have been infected, and 86,025 people have recovered. 

In Australia there are now 786 confirmed cases, with 382 in New South Wales.

Updated at 2.51pm AEDT on 20 March 2020.

More guidance withdrawals: Scentre Group, Vicinity Centres, Sonic Healthcare, Carsales.com

Yesterday's stimulus package and an emphasis on "essential services" have lifted shares in shopping centre owners and operators, despite two major players withdrawing guidance.

Vicinity Centres (ASX: VCX) suspended its guidance yesterday evening, and its shares jumped by more than 10 per cent to $1.147 this morning.

Vicinity's CEO Grant Kelley noted a deterioration in the retail trading and operating environment, with increasing uncertainty around the impacts of COVID-19.

"Given this, we have made the decision to withdraw our FY20 earnings and distribution guidance provided at that time," Kelley said.

"Our shopping centres continue to play an essential role for our communities, especially during this time of concern, providing access to food, household items, products, medical services and banking for everyday needs."

He highlighted shopping centres were defined as providing 'essential services to the community' by the Federal Government, and as such would remain open.

"Vicinity has a solid balance sheet. We are currently operating well within our covenants and have $1.3 billion of undrawn facilities," he said.

"We also have flexibility to defer capital expenditure on major projects until COVID-19 uncertainties are resolved. However, as part of our prudent approach to capital management, and given volatile market conditions, the securities buy-back program has been suspended."

Scentre Group (ASX: SCG), an owner and manager of Westfield shopping centres across Australia and New Zealand, suspended its guidance this morning citing volatility due to the pandemic. Nonetheless, SCG shares rose 23 per cent this morning to $1.85.

Shares also rose 6.3 per cent for Shopping Centres Australasia Property Group (ASX: SCP), and 2.7 per cent for Moelis Australia (ASX: MOE).

Carsales.com (ASX: CAR) has withdrawn guidance due to continued uncertainty in Australian market conditions.

"With the continuing spread of COVID-19, our overriding priority is the safety and wellbeing of our employees and customers in these difficult times," says carsales CEO Cameron McIntyre.

"We have a strong plan in place to reduce exposure to our employees and we have strong business continuity measures in place.

"As a business, we had good momentum prior to the impact of COVID-19 and we are confident in the underlying performance and resilience of our business model. We have a strong balance sheet and prudent gearing, which positions us well to deal with this challenging environment."

On a positive note, the company claims the international business remains resilient with continued good growth in revenue and earnings in South Korea, as well as a similar pattern in Brazil. 

Shares drop for Covid-19 frontline player

Sonic Healthcare (ASX: SHL) was another company to withdraw guidance today, and its shares plummeted a further 8.68 per cent this morning.

"As a global laboratory company, Sonic is currently playing a crucial frontline role in combating the pandemic," says Sonic's CEO Dr Colin Goldschmidt.

"Our laboratories in Australia, the USA and Europe are testing thousands of patients every day for COVID19, and we continue to increase our testing capacity to meet the needs of the communities in which we operate.

"Our expert and experienced management teams and medical staff are working with governments and other healthcare organisations to provide as much assistance as possible."

Sonic Healthcare is also working with its major suppliers to ensure it has the necessary materials and equipment for testing.

"In addition to our focus on meeting the diagnostic testing needs of our communities, we remain focussed on the well-being of our 37,000 staff. I could not be prouder of the reaction of Sonic's people to this crisis," Goldschmidt said.

Other companies that have withdrawn guidance today include Credit Corp (ASX: CCP) and Raiz Invest (ASX: RZI), while Vita Group (ASX: VTG).

Other companies that have previously withdrawn guidance in response to the pandemic include: Boral (ASX: BLD), Downer EDI (ASX: DOW), Adairs (ASX: ADH), Village Roadshow (ASX: VRL), GPT Group (ASX: GPT), Nine Entertainment (ASX: NEC), Bluescope Steel (ASX: BSL), Redcape Hotel Group (ASX: RDC), Prospa Group (ASX: PGL), Hills (ASX: HIL) Accent Group (ASX: AX1), EML Payments (ASX: EML), Ramsay Health Care (ASX: RHC), Aristocrat Leisure (ASX: ALL), Mirvac Group (ASX: MGR), REA Group (ASX: REA), Monadelphous Group (ASX: MND), Coca Cola Amatil (ASX: CCL), Cochlear (ASX: COH), oOh!media (ASX: OML), Qantas (ASX: QAN), Webjet (ASX: WEB), Helloworld (ASX: HLO), Flight Centre (ASX: FLT), Corporate Travel Management (ASX: CTD) and Apollo Tourism & Leisure (ASX: ATL).

Updated at 11:24am AEDT on 20 March 2020.

Michael Hill shuts down stores in Canada

Pursuant to public health guidance in Canada jewellery retailer Michael Hill (ASX: MHJ) will shut down its store network for a period of two weeks.

The company says it will revisit the decision and either reopen or extend store closures as necessary.

Michael Hill's Canadian workforce will take leave without pay or allow staff to take up leave entitlements during the period.

The Covid-19 pandemic has resulted in a significant drop in foot traffic in each of Michael Hill's markets (Australia, New Zealand and Canada) and the company is seeing a corresponding impact on sales.

The company has so far not provided guidance on earnings for the current financial year and is now no longer in a position to make a reliable forecast.

"The Board and management team are confident that the business will be able to continue to work constructively with all of its stakeholders to navigate the uncertainties presented by the COVID-19 public health crisis," says Michael Hill CEO Daniel Bracken.

"Whilst there remain many uncertainties about the potential impact and duration of the crisis, we are focused on taking all necessary actions to reduce our costs and cash outflows so that they better match the very subdued consumer demand in all our markets."

Updated at 10:50am AEDT on 20 March 2020.

US to introduce malaria and HIV meds as Covid-19 treatment

US President Donald Trump says he is slashing red tape in order to get potential treatments for Covid-19 in the hands of patients.

Trump says an existing treatment for malaria called Chloroquine and its derivative Hydroxychloroquine, and an experimental HIV medicine Remdesivir, could soon be available for patients suffering from the coronavirus to try.

The President says new research shows they may hold unique promise as potentially effective treatments for Covid-19.

"Today I want to share with you exciting progress that the FDA is making with the private sector as we slash red tape like nobody has ever done it before," said Trump.

"I've directed the FDA to eliminate outdated rules and bureaucracy so this work can proceed rapidly, quicklyand, I mean, fast. And we have to remove every barrier."

However, this plan might not be as easy as Trump hopes.

According to the Food and Drug Administration (FDA) commissioner Stephen Hahn treatments will still have to go through existing protocols before they can be made available to Covid-19 patients.

Remdesivir is still being tested on patients in clinical trials in the US and China, while Hydroxychloroquine has not even begun clinical trials which typically take a number of years to complete.

Trump has also signed a new bill, called the Family First bill, which provides paid sick leave and paid medical leave for those affected by Covid-19.

Further, US Vice President Mike Pence has announced that the Government is working on making more ventilators accessible to coronavirus patients.

"We've literally identified tens of thousands of ventilators that can be converted to treat patients," says VP Pence.

"And we remain increasingly confident that we will have the ventilators that we need as the Coronavirus makes its way across America."

Updated 9:52am AEDT on 20 March 2020.

Visas to be extended for backpackers and seasonal ag workers

The Federal Government is on the cusp of answering the agricultural industry's call to extend backpacker and seasonal worker visas to allow fruit and vegetables to stay on shelves, and keep farmers in business. 

Last night the Australian Fresh Produce Alliance (AFPA) urged the government to take action on the issue to ensure the virus outbreak does not jeopardise growers' ability to supply fresh produce for all Australians.

"If we do not secure these extensions workers will need to return to their home countries and there will not be the required workers to harvest a large number of fruit and vegetable crops, meaning Australians will not have access to healthy and nutritious fresh produce at this unprecedented time," said AFPA CEO Michael Rogers.

Speaking on ABC Country Hour, Minister for Agriculture David Littleproud said the government was "very close" to making some announcements around changes to visa arrangements.

He said visa entitlements and conditions that currently exist under schemes for Pacific Islanders, seasonal workers, holidaymakers or backpackers, would be extended.

"We've got to understand there's over 140,000 backpackers in the country at the moment, and over 7000 Pacific Island workers with their visas," he said.

"So there is a workforce that is here and it's about making sure that we continue to provide continuity to our producers."

When asked about potential working avenues in the sector for people made unemployed by the Covid-19 crisis, Littleproud replied that there was an opportunity for dislocated people who have lost their jobs.

"But you've got to appreciate that many of those will be in metropolitan Australia," he clarified.

"Now, will a worker in the hospitality industry want to go and pick oranges in Gayndah in Queensland, or go to the Northern Territory when they have family and they have commitments in metropolitan Australia for a six to eight-week period? We have to be pragmatic about the practical reality of people and how they'll act in this."

Michael Rogers of the AFPA explained last night that there are significant numbers of Australians among the 80,000 people employed in fresh produce across the country, as well as seasonal workers from the Pacific and Timor-Leste, and backpackers from around the world.

"While there will be significant employment opportunities for Australians, with AFPA member businesses already employing more than 5,500 Australians across every state of Australia, industry also urgently needs an immediate extension of the visas for seasonal workers and backpackers who are currently in Australia," he said.

Updated at 5:17pm AEDT on 19 March 2020.