I am Leon Gettler. My job is to review and monitor the week’s news in business, finance, and economics. I bring it all to you, every week.

This is episode number eight in our series for 2020 and today’s date is Friday, March 27.

First I talk to Rahul Sood, Unikrn CEO and former GM of Microsoft Ventures. We’ll discuss how Unikrn’s upcoming experience launches will change the gaming landscape. Unikrn is an esports, wagering and gaming company with investors including Mark Cuban, Ashton Kutcher, Elizabeth Murdoch, and others.

And then I’ll be talking to economist professor Sinclair Davidson about the government’s stimulus package and its shortcomings.

But first, let’s talk to Rahul Sood

Listen to the full podcast here:

The world will take years to recover from the coronavirus pandemic the Organisation for Economic Co-operation and Development has warned. Angel Gurría, OECD secretary-general, said the economic shock was already bigger than the financial crisis. He said it was “wishful thinking” to believe that countries would bounce back quickly. Mr. Gurría said a recent warning that a serious outbreak could halve global growth to 1.5% already looked too optimistic. While the number of job losses and company failures remains uncertain, Mr. Gurría said countries would be dealing with the economic fallout “for years to come”.

More than a million Australians could be forced on to welfare by lockdowns to combat the coronavirus, which Scott Morrison warned had plunged the country into an economic crisis not experienced since the Great Depression. Thousands of people queued at Centrelink offices around the country on Monday as the shutdown of much of the hospitality sector put more than 300,000 jobs in jeopardy. And economists predict unemployment will reach 9.4% this year, or 1.22 million people, and the economy will shrink 3%, creating the worst recession most living Australians have experienced. A dozen leading economists have forecast the worst year for Australian businesses and workers since 1931 when many jobless slept in parks and relied on soup kitchens to survive.

Dozens of more companies have slashed their earnings guidance or pulled it all together as investors and directors struggle to grasp the full impact of the coronavirus. No fewer than 40 companies made coronavirus-related announcements to the ASX on Monday, almost doubling the number of profit revisions issued in the previous two weeks, as the stock market suffered another eye-watering fall. The downgrades came from a range of different sectors and industries, reflecting the way the crisis has ricocheted through every corner of the economy both in Australia and around the world. As companies queued up to warn their investors about the bottom-line impact of the outbreak, they did so at a time when the true consequences of the pandemic are still largely unknown.

So how did we get here? Well, Australia will gamble on an unprecedented $189 billion stimulus package to protect the nation from a looming recession, including cash payments of up to $100,000 for small businesses, unsecured loans, wage subsidies and new welfare payments for the unemployed.

Pubs, clubs, churches, cinemas, gyms, indoor sports venues, casinos, and other “non-essential” indoor facilities closed across the country from midday on Monday as Australia moved towards a national shutdown of non-essential services after the government unleashed a second economic rescue package taking the total response to almost $200bn.

Restaurants and cafes will only be permitted to offer takeaway and delivery services. Shopping centres, supermarkets, banks, pharmacies, and hairdressers are among the businesses that will continue operating.   Prime Minister Scott Morrison revealed another $66 billion in spending to help the Australian economy through the coronavirus pandemic. The second package brings the total spend to $189 billion, including $90 billion from the Reserve Bank, worth about 10% of the size of the Australian economy.

It includes giving workers early access to $20,000 worth of superannuation funds if they fall into hardship due to the virus. The measures will double income support for those on JobSeeker (formerly Newstart), more support for pensioners and carers and grants of up to $100,000 for small and medium-sized businesses. The government’s unprecedented stimulus package will give Australians early access to $20,000 from their superannuation if they face financial hardship due to the coronavirus pandemic.

People struggling due to the fallout of the disease will be allowed to access up to $10,000 of their superannuation in 2019-20 and an extra $10,000 in 2020-21 without paying tax. The minimum superannuation drawdown requirements will be cut by 50% for the next two financial years, in a similar measure to that introduced during the Global Financial Crisis, and the government is cutting deeming rates by 0.25%.

A six-month coronavirus supplement of $550 a fortnight will be given to existing and new recipients of benefits including JobSeeker, Youth Allowance, Parenting Payment recipients, Farm Household Allowance recipients, and Special Benefits. This change will cost the government $14.1 billion. A $750 payment to those on social security and veteran income support from July 13 will benefit about 5 million people, of which half are pensioners. Treasurer Josh Frydenberg said businesses will face relaxed rules around obligations under the Corporations Act, such as a requirement to hold general meetings in person, and a higher threshold for creditors to issue statutory demands on companies. The package includes the creation of a Coronavirus SME (small and medium enterprises) Guarantee Scheme to provide access to working capital for businesses to help them weather through the virus.

As businesses around the country face drastic reductions in trade and a forced shutdown, the government has substantially beefed up the suite of grants and tax breaks it announced just two weeks ago. In a move with potentially far-reaching consequences, it also plans to change the rules on liquidation when Parliament meets on Monday so businesses can stay afloat longer even as debts mount.

Small and medium businesses can access grants of up to $100,000 between now and September.  Treasurer Josh Frydenberg said since the government announced its first stimulus package on March 12, it now expected the economic shock to be “deeper, wider and longer”. Tax breaks announced on March 12 will now be doubled, and the offer has been extended to 30,000 charities and not-for-profits. Known as the “boosting cash flow” scheme, it is an incentive for businesses with a cashflow of up to $50 million a year to keep their staff. In another measure that reflects the expectation that businesses will struggle to stay afloat, the government is changing the rules for businesses going bust.

Whereas people owed money by a business can now take action to initiate insolvency or bankruptcy when they’re owed $2000, the threshold will be lifted to $20,000. Company directors will no longer be personally liable for trading while insolvent. The government is also guaranteeing up to 50% of loan amounts to businesses, to ensure banks are still willing to lend as activity sinks to a near stand-still. From early April, businesses will be able to apply for unsecured loans of up to $250,000 each, with no repayments for the first six months. In the first tranche of stimulus on March 12, the government announced that it will pay half of the apprentice wages for nine months.

As a result, Westpac estimates a deficit of 4.5% of GDP, or $90 billion, for this financial year, widening to a deficit of 8% of GDP or $160 billion for the next financial year.

Parliament passed the package on Monday. Parliament won’t return until August as the Morrison government tries to limit sitting weeks during the coronavirus pandemic. Labor and the Greens failed in an attempt to have parliament return earlier, saying the economic packages that passed on Monday would need tweaking. “The idea that the government has just perfectly nailed every aspect of this $66 billion of new spending is absurd,” Labor shadow treasurer Jim Chalmers told parliament. He said the opposition would need to scrutinise any new spending. But the revised calendar won’t see politicians return until August 11. The budget has been pushed back to October 6 with the concession that things are moving so quickly, predictions about the state of the nation’s finances over the next four years in May would be worthless.

The Prime Minister announced that new restrictions on social gatherings agreed by the National Cabinet meant that open homes and home auctions were banned.  This will lead to a material slowdown in sales, but they will still continue unless the social distancing restrictions are extended further.  This has material implications for state government revenues, some of whom rely heavily on stamp duty from home sales. And economists are warning the spread of coronavirus across Australia could see house prices drop 20%, and that will hit the banks.

Consumer confidence has plummeted to its lowest level since Australia’s last recession as shoppers become panicked by the economic fallout from the coronavirus pandemic. The ANZ/Roy Morgan weekly measure of consumer sentiment tumbled 27.8% through the past seven days to sit now just above its all-time low recorded in 1990, down to the level of the last recession.  It is 17% below the bottom reached during the global financial crisis in October 2008.

Bank systems and call centres buckled under the weight of inquiries from customers in distress on Monday, with one major bank revealing call volumes were up as much as 10 times the normal level. Lenders of all sizes were scrambling to answer calls from retail and business customers to make good on promises to back them after tens of thousands of businesses across Victoria, NSW and Queensland were effectively ordered to put the shutters up from midday. A spokesman for ANZ said the bank was experiencing a 400% increase in volumes, while Bendigo & Adelaide Bank’s online banking service suffered an unplanned outage from midday to around 4pm.

The big banks are being forced to close a number of branches on a temporary basis as staff scramble to deal with the early closure of schools and as foot traffic in certain areas plummets. Following the decision from the Victorian state government to close all non-essential services and bring forward the term holidays, banks are being forced to allocate customer-facing staff to where they are needed most as families organise alternative childcare arrangements. Each of the big four banks are encouraging customers to use online banking or apps unless absolutely necessary. They are also reinforcing the message that customers should practice social distancing at their branches and should not visit a branch if they are unwell.

Virgin Australia has stood down 8000 workers, suspended budget subsidiary Tigerair Australia, and temporarily grounded 125 planes in its latest response to the COVID-19 pandemic. Virgin Australia said it was reducing its domestic capacity by 90% and suspending Tiger Airways domestic services, effective immediately. After saying it would stop all international flying last week, the nation’s second-largest airline has now slashed domestic capacity by 90% as states close their borders.

Makers of surgical protection wear, hospital disinfectants and hand sanitisers are dramatically scaling up production with the aid of the military to meet the urgent demand from government and health authorities as the number of coronavirus cases in Australia passes 2000.

Med-Con, a small family business that manufactures surgical face masks on the outskirts of Shepparton, Victoria, is at the vanguard of this push. The federal government has sent the army into Med-Con’s factory to help the company urgently lift production by at least 10-fold. Med-con general manager Steven Csiszar said that by the end of the year his small business of fewer than 20 employees and just two machines will be making 20 million to 30 million face masks a year, which he said would be enough to meet surging demand. In NSW, the country’s biggest manufacturer of medical-grade disinfectant and hand sanitiser, the family-owned Whiteley Corporation near Newcastle, has more than doubled production over the last month but warned it is running dangerously low on key raw materials, such as ethanol.

The hotel industry and unions have reached an extraordinary agreement to cut minimum work hours and suspend restrictions on duties to save jobs during the coronavirus crisis. The Australian Hotels Association and the United Workers Union successfully applied to suspend workplace rules in the hospitality award on Tuesday for up to three months as almost one million workers in the sector risk losing their jobs. The consensus position came as the hospitality industry led the sweep of job losses this week with baristas and bartenders lining the streets outside Centrelink offices and as economists forecast the unemployment rate is set to more than double

Major hotels will be turned into quarantine zones and even hospital wards in an emergency plan that is also mobilising industry to fill looming shortages for medical equipment to fight the coronavirus. Hotels are demanding they be treated as essential services with governments ordering community shutdowns, arguing they can make rooms available for healthcare or self-isolation. The head of Australia’s largest private health insurer also predicts private hospitals will be required to treat COVID-19 patients amid concerns intensive care units and other health services will be overwhelmed.

And that’s it for this week. And next week, I’ll be talking to executive and leadership development coach Ronan Leonard who connects people up with his online platform Eccountability, the first global virtual mastermind platform. And I’ll be talking to Indeed economist Callam Pickering analysing Australia’s unemployment figures and what the RBA is doing about it.

In the meantime, you can find me on Twitter at talkingbizz, on Facebook, and on LinkedIn. And if you want, leave a comment. Wishing you all a safe and healthy week and looking forward to bringing you Talking Business next week.