Covid-19 News Updates

JobKeeper hotline to be established, ATO ramps up workforce

A hotline managed by the Big Four banks will be deployed to help businesses get bridging finance before JobKeeper payments hit their bank accounts.

At a press conference today the Federal Treasurer Josh Frydenberg said businesses eligible for JobKeeper must continue to pay staff before the stimulus is received.

To ensure this happens Australia's major banks, in partnership with the Federal Government, will establish a hotline for businesses that need bridging finance in the meantime.

"Our message today is if you are a business or a not for profit operation that is eligible for the JobKeeper payment, as required, you need to pay your staff ahead of receiving the money from the Tax Office," Frydenberg said.

"Go to your bank, ring their hotline, ask for that support, and that support will be forthcoming."

While the banks are setting up this hotline, the Federal Government is reinforcing the Australian Tax Office with a "surge" in new staff to manage JobKeeper payments.

According to Prime Minister Scott Morrison there have been 3,000 new staff added to the ATO.

In addition, 5,000 new staff have been brought onto Services Australia, which manages JobSeeker and other social benefits claims.

These new staff have been madly processing an influx of applications for both the JobKeeper and JobSeeker programs. The PM says so far Services Australia has processed around 587,585 applications for JobSeeker, while 275,000 businesses have applied for JobKeeper.

"That is more than we do in a year," the PM said.

"That has been an extraordinary effort from those services and I also want to thank the patience of Australians for the way they have been engaging with Government Services Australia."

Further, the ATO has approved 456,000 applications for early access to superannuation, equating to around $3.8 billion in payments. These claims will be paid out in the next five days.

"The average withdrawal is around $8,000," Frydenberg said.

"The ATO has also paid out $3 billion to 177,000 businesses employing 2.1 million Australians as part of our cashflow boost measure, which was a measure designed to support businesses, keep people employed, meet their fixed costs, by linking those payments - up to $100,000 and a minimum of $20,000 - to those payrolls."

The PM also confirmed that the Australian Office of Financial Management (AOFM) has raised over $40 billion, with two thirds of that raise in bonds and the other third in notes.

"The AOFM has indicated the trading volumes and pricing out to around 12-year bonds are returning to more normal levels," says Morrison.

"Now, our ability to raise this sort of finance in these sorts of markets, I think, says a lot about the standing of Australia in these financial markets and the credit worthiness of Australia and this will be critical to ensure that we can continue to provide this economic lifeline Australians."

Australia to open borders to New Zealand first

When asked about easing certain restrictions regarding travel and gatherings, the Prime Minister said he had been in discussions with New Zealand Prime Minister Jacinda Ardern about potentially reopening borders.

The PM says if we were to relax international travel restrictions it would be to and from New Zealand first.

"If there is any country in the world with whom we can reconnect with first, undoubtedly that's New Zealand," Morrison said.

"We have similar trajectories, their restrictions have been far greater, our case response has been the same if not better than New Zealand. So if there's any country where we can look to achieve that then I would have thought New Zealand would be the obvious candidate."

Morrison's comments come as Chief Medical Officer Brendan Murphy stressed this morning that restrictions on international travel would remain in place for at least another three to four months.

Speaking to the Senate Committee into Australia's response to Covid-19, Murphy said any relaxation of border measures would be "very risky".

"We've just recommended to the National Cabinet that we continue the very restrictive bans on Australians basically leaving the country unless there are exceptional circumstances, or anyone except Australian citizens coming back," Murphy said.

The CMO hinted the National Cabinet was considering easing restrictions on small groups in the coming weeks, with community sport potentially the first to be greenlit.

Large scale gatherings like music festivals and sporting events are still completely off the table according to Murphy, implying the tough social distancing measures imposed on Australians could be eased in a reverse order to how they were implemented.

Environmental approvals for major projects achieved at a faster rate in March quarter

The Prime Minister has stressed that the Government is working at a rapid pace to pass environmental approvals for major projects to stimulate the economy.

In the December quarter 19 per cent of projects were being approved on time, but that statistic has shot up in the March quarter to 87 per cent.

"Ensuring that we're moving quickly through approval processes and providing that certainty for business investment and the regulatory arrangements that are in place, that will be a two part economic recovery strategy," says Morrison.

Updated at 12:47PM AEST on 23 April 2020.

Webjet raises too much money

The global tourism industry may be stagnant, but travel company Webjet (ASX: WEB) has made the financial equivalent of an overbooking in its latest capital raising.

The Melbourne-based travel services aggregator received so many applications for a top-up facility that it will now have to give back $14.5 million in refunds.

After exceeding expectations by raising $231 million in an institutional offer on 2 April, Webjet decided to lift the retail entitlement offer by close to 14 per cent at $115 million.

That amount was exceeded yesterday after applications were made for $86 million in shares under the retail offer, as well as a further $46.7 million in eligible applications for the top-up facility. 

Reaching a combined $132.7 million worth of applications, top-up facility limits under the scheme have meant Webjet is scaling the figure back to around $118.2 million.

"It has been necessary to scale back applications for approximately 27.5 million additional shares applied for under the top-up facility," the company said.

"All eligible applications for additional new shares will be scaled back by approximately 31 per cent.

"The scale back will be done on a pro-rata basis across all applications. Refunds totalling approximately $14.5 million in respect of scaled back applications under the top-up facility will be dispatched to retail shareholders as soon as practicable."

Updated at 12:01pm AEST on 23 April.

Carsales.com stands down staff as transactions dip

Carsales.com (ASX: CAR) has temporarily stood down around 250 employees in Australia as social distancing measures take their toll on sales volumes across the country.

Most of these stand downs have been on a partial basis for external customer-facing roles where activity has been impacted due to coronavirus-related restrictions from the government.

Private seller and dealer used car lead volumes were "growing solidly" in the lead-up to 10 March, but from that date until 21 April lead volumes were down 25 per cent on average.

The sales trajectory has improved since the Easter weekend, but the previous drop-off has led to a 9.5 per cent increase in inventory on carsales.com.au to 230,000.

The rise in inventory is also due to the company waiving its fixed and variable advertising charges for dealers in April, along with offering a 50 per cent discount for May.

"This support package will contribute significantly to reducing dealers' short term operating costs and demonstrates carsales' strong commitment to supporting the Australian industry it serves through these difficult times," the company said.

"Traffic on carsales.com.au has remained resilient over the past month, which is a reflection of the underlying demand that exists for buying, selling and researching cars even in this challenging environment."

The total amount of stock has also been lifted by some car manufacturers opting to relax third-party advertising restrictions for new cars.

In a bid to reduce costs further, board and executive remuneration has also been cut by 20 per cent from 1 April to 30 June, while the amount of outdoor brand marketing has also been reduced.

Management believes the company is well placed in the current operating environment, with a net debt position of $355 million and a strong liquidity position of $190 million in available cash.

"Our overriding priority continues to be the safety and wellbeing of our employees and customers around the world in these challenging times," says CEO Cameron McIntyre.

"We remain focused on managing short term performance while positioning the business to come out of the current environment in good shape.

"Our market leading position, strong customer proposition and diversification across geography and product supports our resilience and positions carsales well into the future."

Overseas, Carsales.com's Korean business is tracking well with economic activity "significantly less impacted than many other first world countries".

In Brazil, where the country's president Jair Bolsonaro continues to downplay the virus while at loggerheads with state governors over their social distancing measures, Carsales.com's Webmotors has seen its lead volumes fall by 30 per cent.

Updated at 11:04am AEST on 23 April 2020.

Radio Rentals to expand online offering to manage Covid-19 crisis

The parent company of Radio Rentals will bolster the retailer's online presence after announcing the closure of 62 stores and selected warehouses earlier this month.

The closures meant approximately 300 in-store and head office employees were made redundant, according to Thorn Group (ASX: TGA).

To manage the downturn in the retail sector Radio Rentals will operate online. Thorn says the group's website will be enhanced with an expanded product range to match the needs of its customer base during the Covid-19 crisis.

"I am disappointed that we have been forced to make hard decisions regarding our staff and store network, however they have had to be made to ensure Thorn Group continues to operate and thrive in the future," says Thorn Group CEO Peter Lirantzis.

"We intend to re-develop both the Radio Rentals' digital business model and Thorn Business Finance once the Covid-19 crisis has passed."

Lirantzis says Thorn has around $40 million in cash presently and is actively pursuing a range of cost-cutting initiatives and recovery processes to generate increased cash flow over the next year.

These include new credit policies and collection processes, as well as cutting head office costs.

Updated at 10:21am AEST on 23 April 2020.

Australia calls for international action on wildlife wet markets

The Australian Federal Government has called for increased international scrutiny of wildlife wet markets to avoid a repeat of the Covid-19 outbreak.

At the virtual G20 meeting of agricultural ministers, Australian Minister for Agriculture David Littleproud said wet markets are a biosecurity concern and pose a global health risk.

"We must learn from Covid-19 on how we better manage and mitigate both human and animal biosecurity risks and to ignore wildlife wet markets in that assessment would be wrong," Littleproud said.

"There are risks with wildlife wet markets and they could be as big as a risk to our agricultural industries as they can be to public health so we have to understand them better."

Littleproud called upon the G20 to take action and lead the way by drawing upon global experts and engaging international organisations to contemplate and mitigate the risks of wildlife wet markets.

"Our people should have confidence that the food they eat is safe," Littleproud said.

"We owe it to our domestic population and our international markets."

During the G20 meeting of agricultural ministers Littleproud also pressed the leaders to accelerate trade negotiations to remove technical trade barriers and alter tariffs that pose an impediment to food supply chains.

He said while there is not a shortage of food globally, international supply chains are being stressed by technical trade barriers that is hindering supply efforts globally.

Updated at 9:46am AEST on 23 April 2020.

WA resumes air freight to Singapore

The Western Australian Government has announced a flight loaded with pork, beef and vegetables departed Perth today for Singapore, marking the recommencement of an agrifood export trade that has been hammered by capacity restrictions with planes grounded.

About 10 per cent of the value of WA's annual agrifood exports is transported via air freight, worth $804.6 million in 2018-19, which is primarily dependent on cargo capacity available through commercial passenger flights.

More than $50 million of WA agrifood products were airfreighted into Singapore in 2018-19, led by chilled pork.

The McGowan Government has committed up to $624,000 towards temporarily offsetting significantly increased air freight costs and supporting dedicated freight services, ahead of the Federal Government's International Freight Assistance Mechanism.

The Federal Government's package applies to freight leaving Melbourne, Sydney, Brisbane and Perth, and is initially focused on the export markets of mainland China, Japan, Hong Kong, Singapore and the UAE.

Funding has been provided to processor Linley Valley Pork as WA's main agrifood exporter into Singapore.

This agreement is subject to up to 30 per cent of the available cargo payload also being made available to other WA agriculture and food products, so that established exporters who have had their supply into Singapore disrupted are able to access available air freight capacity.

"Our international trading partners are vital to the sustainability and prosperity of the WA agriculture and food sector," says WA Agriculture and Food Minister Alannah MacTiernan.

"With almost no available air cargo capacity for fresh produce out of Perth, the cost of air freight has sky-rocketed, in some cases five times that of pre-Covid-19 pandemic prices.

"The funding supports chartered freight flights into Singapore, helping to offset the current heightened freight costs faced by WA exporters."

Updated at 5:11pm AEST on 22 April 2020.

ACCC allows retailers to collectively bargain with landlords

The ability of retailers to strike rent relief deals has been given a boost today after the country's competition regulator granted permission for collective bargaining with landlords.

Around two weeks after the Prime Minister formally announced a mandatory tenancies code aimed at helping landlords and tenants navigate the Covid-19 crisis, the Australian Retailers Association (ARA) has been given interim rights that would not be allowed in normal times.

The Australian Competition and Consumer Commission (ACCC) plays a vital role in ensuring healthy market competition to the public's benefit, and is one of the most highly rated government agencies of its kind in the world.

But the Covid-19 shock has led the watchdog to make good faith exceptions for a variety of industries, including supermarkets, airlines, medical equipment suppliers, medicine manufacturers, petrol retailers, insurance companies and telcos.

Today the retail sector joins that list, with the ARA's current and future members also given the right to share information that is relevant to rental negotiations.

"We see a clear public benefit in allowing retailers to work together in the negotiations with landlords as it will help those tenants who are experiencing financial hardship during this pandemic to reach a fair outcome," says ACCC chair Rod Sims.

"We need to maintain strong competition in the retail sector and supporting these businesses will help with economic recovery once the pandemic subsides."

The authorisation is voluntary and temporary, and does not include individual tenants exchanging information about the amount of their rent or any rent incentives they were previously granted.

"As with all of the temporary arrangements that industries are looking to implement as a means to deal with the COVID-19 issues they are facing, we will keep under consideration when they are no longer necessary," says Sims.

Having granted interim authorisation for the arrangements, the ACCC will now seek feedback on the application for final authorisation which is sought for a period of 12 months from the date of authorisation.

Updated at 4:10pm AEST on 22 April 2020.

Myer brings back 2,000 staff as online sales surge

Department store Myer (ASX: MYR) has today announced a four-week extension of its temporary store closures, but the news came with a silver lining.

Following the Federal Government's social distancing measures, Myer has opted to keep its physical stores shut until at least 11 May but has a view to reopening "as soon as possible".

Online sales used to be Myer's Achilles heel as it struggled to keep up with a rapidly changing retail environment, but e-commerce has been integral to the company's turnaround strategy.

The company's online business has been performing so strongly since 29 March that 20 per cent of team members - or 2,000 of the 10,000 who were stood down last month - have been asked to return to work to support online fulfilment.

"The strong growth in the online business during the past few weeks has been particularly encouraging," says Myer CEO John King.

"The decision to extend the period of temporary closure of all physical stores was extremely tough, but it is reflective of our continuing focus on operating our business in a manner that protects the health and wellbeing of customers and team members, whilst supporting the government efforts to limit the spread of COVID-19 through stay at home directions and other social distancing measures.

"Our plans for reopening our physical stores are well advanced and we look forward to welcoming customers back into stores, when it is safe to do so."

The announcement comes shortly after major e-commerce player Kogan.com (ASX: KGN) reported its highest monthly increase in active customers in March since its 2016 IPO.

Elsewhere in retail, Woolworths (ASX: WOW) this morning announced it had doubled its online capacity over the past month, while a new "Pop-Up" Delivery Hub will be opened at a at a 7,000 sqm warehouse in the Melbourne suburb of Notting Hill by the end of the week.

"We're seeing a big increase in demand for home delivery as more and more customers seek to limit their outings in the community," says Woolies managing director Amanda Bardwell.

"We've worked hard behind the scenes to find innovative ways to provide this much-needed additional delivery capacity across Australia. In partnership with Sherpa and Drive Yello, we now have a highly flexible and scalable way to meet the needs of many more of our online customers in the weeks and months ahead."

The Commonwealth Bank's (ASX: CBA) latest Household Spending Intentions (HBI) series found consumers' intentions to spend at retail jumped substantially in March.

"The surge in spending in March was likely related to consumer's response to the developing Covid-19 shutdown and a jump in spending on supermarket items, alcohol and household equipment and furnishings," CBA said in the series.

The Australian Bureau of Statistics' (ABS) preliminary retail trade figures show those intentions translated to action, with retail turnover up 8.2 per cent last month.

"This is the strongest seasonally adjusted rise ever published in the Retail Trade publication, surpassing an increase of 8.1 per cent in June 2000 when households brought forward expenditure ahead of the GST implementation," the bureau said.

As mentioned by CBA, the ABS notes unprecedented demand in March in the Food retailing industry.

"Additional analysis indicates monthly turnover doubled for products such as toilet and tissue paper, and rice and pasta. In addition to food retailing, sales were also strong in retail industries selling items related to home offices for example," the ABS said.

"The rises were slightly offset by strong falls in industries including cafes, restaurants and takeaway food services, and clothing, footwear and personal accessory retailing, which were impacted by new social distancing regulations introduced in March."

Updated at 3:25pm AEST on 22 April 2020.

Victoria predicts unprecedented hit to the economy, mass unemployment

Modelling conducted by the Victorian Government has predicted levels of unemployment and economic decline "unlike anything most Australians have seen in their lifetimes".

Based on the research undertaken by the Victorian Department of Treasury and Finance, the Covid-19 crisis could lead to 270,000 jobs being lost in the state, with the unemployment rate to peak in the September quarter of 2020.

Further, the modelling shows that Gross State Product will decline by an unprecedented 14 per cent in the June quarter.

"It is impossible to overstate the devastating impact the coronavirus pandemic is having on lives and livelihoods we owe it to Victorians to do everything we can to save lives and save jobs," says Victorian Premier Daniel Andrews.

"These numbers confirm what the Governor of the Reserve Bank and the Federal Treasury have already made clear Australia is facing an unprecedented economic crisis but we'll keep working with the Federal Government and as part of the National Cabinet to help our nation respond and recover."

The Victorian Government is currently bringing a $500 million support package to Parliament to implement urgent reforms such as a temporary ban on evictions, pauses on rental increases for six months and provides land tax relief for landlords and rent relief for tenants.

Further, Victoria will defer the planned increase in the landfill levy until 1 January 2021, which should save taxpayers around $33 million across the rest of the calendar year.

These measures build on the Victorian Government's initial $1.7 billion Covid-19 stimulus package. Already more than $400 million in payroll tax refunds have been paid out to 17,000 small and medium sized businesses as part of that package.

Updated at 12:02PM AEST on 22 April 2020.

Clinical trials begin for two potential Covid-19 treatments

A study into the effectiveness of HIV and anti-malarial drugs in treating the virus that causes Covid-19 has kicked off in Australia, with plans to recruit 2,500 patients in more than 70 hospitals around the country and 11 hospitals in New Zealand. 

Led by Melbourne's Doherty Institute, the AustralaSian COVID-19 Trial (ASCOT) is set to include patients in every state and territory.

The Royal Melbourne Hospital is the first site for the clinical trial, headed up by Associate Professor Steven Tong (pictured), an infectious diseases clinician at the hospital and co-lead of clinical research at the Doherty Institute.

Lab tests have shown that lopinavir/ritonavir, which is currently used to treat HIV, and hydroxychloroquine, used to treat arthritis and prevent and treat malaria, can stop the virus SARS-CoV-2 in its tracks.

Associate Professor Tong says while the World Health Organisation (WHO) considers both these drugs to be promising treatments for Covid-19, more research is needed to be sure they are safe and effective in humans.

"The aim of ASCOT is to test whether using these drugs will prevent patients deteriorating to the point of needing a ventilator in the intensive care unit (ICU)," he says.

"We have designed the trial so that it's responsive and adaptive. This means that if one of the drugs is proving to be effective, we can adapt the trial to focus on that treatment. Conversely, if a drug isn't effective, or is causing severe side effects, we can stop it.

"Having such a coordinated approach nationally and in New Zealand means that not only can many patients participate, but we can also generate the evidence as quickly as possible. Ideally, as other potential treatments become available, these can also be tested within the coordinated framework of ASCOT."

He confirmed as of Thursday, 16 April, patients have been actively screened for recruitment to the trial at The Royal Melbourne Hospital.

"ASCOT is a randomised trial, which means that patients will be randomly allocated to different treatments. As is the nature of a clinical trial, some patients will not receive either drug, which is the current "standard of care" for patients with COVID-19," he says.

"This will allow us to answer whether patients who received a specific drug fare better, worse or the same compared to patients who received a different drug or standard of care.

"We plan to have other trial sites up and running later this week across Australia and to significantly contribute to the limited body of knowledge on how to treat COVID-19."

Philanthropy has played a significant role in funding ASCOT with generous commitments from the Royal Brisbane and Women's Hospital Foundation, Anthony Pratt and The Pratt Foundation and the Minderoo Foundation.

Key partner organisations involved in ASCOT are the Hunter Medical Research Institute, Australasian Society for Infectious Diseases Clinical Research Network and University of Queensland Centre for Clinical Research/Royal Brisbane and Women's Hospital.

Updated at 11:59am AEST on 22 April 2020.