Groups face limit of 100

PUBS, cinemas and large restaurants could be hit by unprecedented restrictions on mass gatherings as the nation’s leaders ramp up their efforts to slow the spread of the coronavirus.

Scott Morrison will today reveal the latest phase in Australia’s plan to tackle the virus – likely to include slashing the limit on indoor “static’’ gatherings to as few as 100 people.

Last night’s national cabinet meeting also considered new measures to lockdown aged care homes, with the elderly the most vulnerable to the virus.

The Government will also unveil a $715 million relief package for the nation’s troubled airlines, refunding and waiving expensive fees as flights are grounded.

A wartime cabinet including the Prime Minister and state and territory leaders met last night to consider the latest medical advice on public gatherings, which have so far been limited to 500 people, forcing the mass cancellation of sporting and cultural events.

It is understood authorities had been leaning towards a new limit of 100 or 150 people. The closure of large hospitality and entertainment venues – already happening across Europe and the United States – is expected to be accompanied by billions of dollars in new federal assistance to help businesses survive the crisis.

Finance Minister Mathias

Cormann conceded “the grim reality” was “many’’ businesses would close, as the Government braces for a spike in unemployment.

“This makes the global financial crisis look like a walk in the park,” a senior source said last night.

A second stimulus package, following an initial $17.6 billion injection last week, will be unveiled within days, with the Government believed to be exploring options to guarantee business loans, refinance debt and take on some risk held by the banks. The Reserve Bank is preparing to launch its own emergency measures tomorrow, tipped to include another interest rate cut and what would effectively be a money-printing blitz.

Amid fears of a recession, Australia’s share market closed 5.8 per cent higher yesterday – its biggest gain since 1997 – on a wild day that followed the biggest one-day rout since the 1987 crash, a 9.7 per cent plunge on Monday.

Mr Cormann promised the Government would deliver to businesses “the appropriate levels of support through this transition to the other side when there will be a strong bounce back”.

“We are going to try to keep as many Australians in jobs as possible … but we will also be providing appropriate levels of support for those Australians who, over the next few weeks and months, will not be able to remain in employment,’’ he said.

AUSTRALIA’S key share index has staged the biggest rally for any session in its 20year history, defying a brutal sell-off on Wall Street.

The wild swing came as investment bank Macquarie warned losses from the coronavirus bear market could be worse than those of the global financial crisis.

Ratings agency Standard and Poor’s also said that while Australia’s banks were well placed to ride out the economic turbulence, bad loans would double and they faced “significant problems” if

COVID-19 did not peak globally by the end of June.

The ASX 200 spiked 5.8 per cent yesterday to close at 5293.4 points.

It was the biggest one-day gain for the index, which broadly tracks the nation’s 200 biggest listed companies, since it was launched in 2000.

Blue-chip favourites were among the biggest winners – the Commonwealth Bank and ANZ, and mining titan BHP posted double-digit gains.

The rise came despite Wall Street overnight Monday crashing to its biggest one-day loss since the 1987 stock market crash.

“The market is almost unable to be valued at the moment because of the sheer panic,” InvestSmart chief market strategist Evan Lucas said.

The gains pared back some of the losses for the ASX 200, which is down 26.1 per cent since hitting a record high on February 20, erasing $562.2 billion in shareholder value.

Chant West predicts the median balanced super fund has lost about 13 per cent since the start of the year.

Macquarie warned the Australian market could fall another 27 per cent if the pandemic triggered a longlasting global recession.

The ASX 200 had fallen about 30 per cent when Macquarie issued the research note, implying a peak-totrough fall of about 57 per cent if the bank’s worst case scenario eventuated. That would overtake losses posted in the GFC, when the index shed 54 per cent from November 2007 to March 2009.

“Once we see the peak in daily growth in US cases it will be a positive sign that we may be past the worst and this should allow equity markets to form a bottom,” Macquarie analyst Matthew Brooks said.

S&P Global Ratings said it expected bad loans for Australian

banks to nearly double this year to about 0.3 percentage points of gross loans and advances as COVID-19 dealt a severe blow to economic activity.

But the banks were well placed to absorb the losses, and bad debts were rising from a historic low, it said.

“Australian banks can absorb the increase in credit losses and disruption to funding markets due to the COVID-19 outbreak without posing any immediate or significant risks to the banks’ creditworthiness,” S&P said. “Credit losses should remain low compared with international peers.”