(Australian Associated Press)
The federal government has tightened foreign investment rules after global fears about the economic impact of the coronavirus caused the value of Australian businesses to fall.
There are concerns cashed-up foreign predators could take advantage of the fall in asset values fuelled by a massive slump on the Australian Securities Exchange.
The temporary change, which came into effect late on Sunday night, would protect Australia's national interest, Treasurer Josh Frydenberg announced.
From now all proposed foreign investments, subject to the Foreign Acquisitions and Takeovers Act, will require federal approval, regardless of value or the nature of the foreign investor.
"This is not an investment freeze. Australia is open for business and recognises investment at this time can be beneficial if in the national interest," Mr Frydenberg said in a statement on Monday.
The temporary change involves reducing to zero dollars the monetary screening thresholds for all foreign investments under the act.
"By temporarily reducing the foreign investment thresholds, the Australian government will ensure appropriate oversight over all proposed foreign investment during this time," Mr Frydenberg said.
The treasurer played down suggestions the measure was partially aimed at potential investment activity by Chinese state-sponsored firms.
"These measures are not directed at one particular country," Mr Frydenberg told Sky News.
The Treasurer noted China was Australia's fifth largest investor last year with investments of around $13 billion while the US was the number one investor with investments of around $58 billion.
"Those thresholds that have previously been in place are not necessarily appropriate for right now because these are extraordinary times that we are living in," he added.
The government stressed the importance of foreign investment in helping many businesses to secure jobs and support Australia's economic recovery beyond the coronavirus emergency.
The measure will remain in place for the duration of the current crisis.
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(Australian Associated Press)
The world's largest economies are urgently working together in a bid to ease the impacts of a looming global recession because of coronavirus.
Treasurer Josh Frydenberg took part in a conference call on Monday evening with other financial leaders of G20 countries, the International Monetary Fund and the Organisation for Economic Co-operation and Development, as well as central banks from across the world.
Mr Frydenberg said about 80 countries had asked for financial support from the IMF as the impact of the pandemic becomes acute on developing countries.
"The expectation is that global growth will be negative this year," he told AAP in a statement.
"All governments agreed that coordinated global fiscal action is required, including providing increased liquidity to financial markets and sharing experiences in domestic markets.
"There is a real sense of urgency which is being reflected in the large economic support packages being released."
G20 leaders including Scott Morrison and Donald Trump will meet for a virtual summit later this week as the world races to contain the virus.
The summit, called by this year's chair, Saudi Arabia, will be complicated by an oil price war between two members, Saudi Arabia and Russia, and rising tensions between two others, the United States and China, over the origin of the virus.
US Treasury secretary Steven Mnuchin told Fox News his counterparts agreed to act to support their own economies, and coordinate internationally as needed. But he gave no specifics.
"This is a team effort to kill this virus and provide economic relief," Mr Mnuchin said.
The US government is struggling to win congressional approval for a nearly $2 trillion rescue package.
The IMF and the World Bank have both forecast the pandemic would trigger a global recession in 2020.
Argentina, whose debt has been deemed unsustainable by the IMF, warned fellow G20 members they must act decisively to "avoid a social meltdown" as the pandemic spreads.
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(Australian Associated Press)
The federal government should be prepared to maintain its assistance to business for as long as a year because it will take time for firms to get back to normal once the coronavirus crisis is declared over.
Australian Industry Group chief executive Innes Willox also believes the impact of COVID-19 has exposed gaps in the economy that are too reliant on overseas supplies.
"My prediction will be that post this there will be a significant push towards doing more back in Australia," Australian Industry Group chief executive Innes Willox told ABC radio on Wednesday.
"I think self-reliance will become more of a mantra."
From the early stages of the crisis, supply chains broke down given Australia's dependence on Chinese imports, which more recently has been felt in medical goods, such as face masks.
The Morrison government has already legislated for tens of billions of dollars worth of financial support for business over coming months to help keep their doors open and their staff employed.
While thousands of jobs have already been lost as the hospitality industry shuts down in an attempt to curb the spread of the virus, more are expected to be lost.
Mr Willox said businesses are trying to hang on to staff where they can because they know once they lose them they will be hard to get back.
"One day when this is over business won't just return to normal the next day, it is going to take time for business to get up and running again," he said.
"So whatever assistance is in place has to last maybe three to six months longer than this."
Despite all the doom and gloom, Australian shares rallied a further four per cent on Wednesday on hopes that a massive US stimulus will support the world's largest economy.
The Australian government has given up on its much-pledged return to a budget surplus this year in attempt to cushion the blow to the economy from COVID-19 and now looks set to run up massive deficits.
Westpac economists expect a deep recession the first in nearly three decades and a spike in the unemployment rate to 11 per cent by mid-2020, more than double the rate it is now.
As such they expect the budget position will deteriorate sharply over this year and next.
From a balanced position in 2018/19, they expect the budget will sink into a $90 billion deficit in 2019/20 and than $160 billion in 2020/21, which take into account the government's stimulus measures and the deterioration in the economy.
"We would caution that the situation is very fluid. It remains highly uncertain how long the widespread shutdowns and cancellations wreaking havoc on the economy will persist," Westpac economist Bill Evans said in a note to clients.
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18 March 2020
Unfortunately, scammers are taking advantage of the spread of coronavirus to exploit and play on the fears of consumers across Australia.
Scammers are doing things such as falsely selling coronavirus-related products online, and using fake emails or text messages to try and obtain personal data.
Other scams include phishing emails and phone calls impersonating the World Health Organisation, government authorities, and legitimate businesses including travel agents and telecommunications companies.
Common types of coronavirus scams
We have received reports of:
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Money and Life
(Financial Planning Association of Australia)
Keeping busy with work and family year after year can make it tricky to decide how to spend time in retirement. Discover ways to feel your best and make the most of life after work.
1. Keeping active
According to research from Sydney University, people who have retired generally adopt a healthier lifestyle than their working peers. With more time on their hands, retired people are getting a better night's sleep and more exercise. The study of 25,000 older Australians shows that retired people sleep 11 minutes longer and spend 93 minutes more per week keeping physically active, compared with the same age group still in the workforce. These findings could be part of the reason why Australians are living longer. "We hope this information could translate to better health in older Australians, preventing cardiovascular disease and diabetes," says Dr. Melody Ding, lead researcher for the study.
So what could your healthy lifestyle in retirement look like? If you already like to run, hike or cycle, you'll have more time to enjoy these activities and won't need to budget for extra equipment. Joining a gym or sports team is another way to add exercise into your weekly routine, and make new friends too.
2. Staying social
Your social networks in retirement are just as important to your health and wellbeing as a regular commitment to exercise. In a 2013 research study, Oliver Huxhold from the German Centre of Gerontology found a significant difference in life satisfaction among older people who regularly take part in activities with friends. Not only does this social activity improve mental health and boost positive feelings, it can also protect people from the negative effects of ageing.
Work can often play a big part on our social life. In retirement, you can find yourself feeling isolated when you've been used to daily contact with colleagues and friends from work. So it's important to strengthen social ties with friends, new and old, who share your interests. There are all kinds of ways to reach out to like-minded people in your community, through volunteering, joining clubs or local interest groups.
3. Working and volunteering
Not everyone sees retirement as their chance to stop working altogether. Continuing to work in some capacity can be a very positive lifestyle choice, giving your days and weeks a welcome routine and purpose. Part-time work can also be a great way to supplement your income in retirement and help your savings last longer. Having more time on your hands can also allow you to set-up that business you've always wanted to try or start a hobby that could turn into an extra source of income.
After a lifetime of work, you're likely to have knowledge and skills to offer others through a mentoring or tutoring arrangement. This can be a very rewarding way to develop your social network and you can choose whether to accept payment or offer your time and skills as a volunteer. This is one of many types of volunteering that can give you the sense of purpose you enjoyed in your work and enable you to make a positive contribution to your community.
4. Spreading your wings
With fewer demands on your time, perhaps you can get around to ticking some destinations off the bucket list? Whether you're planning to head overseas or pack up a caravan and join the growing ranks of grey nomads, travel in retirement can be a very rewarding experience. According to Tourism Research Australia, the Grey Nomad trend - people age 55+ spending long periods travelling around Australia is growing, with a massive 90% increase in the number of 55 to 70-year-old domestic travellers since 2000. Many people find they can live on a more modest budget as they travel. Others are just drawn to the lifestyle that comes with road tripping their way through retirement.
If you're heading overseas, many companies organise travel programs specifically for people who are retired. These trips can be ideal if you're looking to meet and travel with likeminded people and have all the hard work and planning taken care of. When travelling for extended periods, it's worth organising a Power of Attorney to make it easier to manage your personal and financial affairs from abroad.
5. Family commitments
Having more time to spend with family can be one of the greatest rewards of retirement. Many retirees love to be involved with caring for grandchildren. Having finished work, they have fewer responsibilities to juggle and may welcome the chance to focus attention on their newest family members.
However, taking on too much responsibility for the care of others - whether that's grandchildren and/or elderly parents - can limit the time you have to look after yourself and do other things you enjoy. And when it comes to helping family out with money, be sure you're not putting yourself in a vulnerable position with your own finances and be aware of any circumstances where a family member is taking advantage of your goodwill and generosity with money. Cases of elder financial abuse are most likely among family members and there is support and help available if you think you may be experiencing financial abuse.
6. Location, location
Where you live can often be one of the most important choices to make for your future wellbeing in retirement. It can have a big impact on what you'll do with your time and who you'll spend it with, as well as your retirement budget. Sometimes downsizing can make sense for practical reasons, as it can allow you to move somewhere that's easier to maintain and 'lock up and leave' if you're planning to travel. For others, it's a way to use the equity in their home to fund their retirement.
If you're planning to sell and make a sea change, this can bring more budget benefits if you're moving to a location where the property and lifestyle is more affordable. But it's also important to think about the possibility of starting from scratch with your social life in a new neighbourhood and having access to activities you enjoy and the transport and health facilities you might need as you grow older.
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