Deloitte Access Economics’ latest Budget Monitor contains a sobering assessment of the impact of COVID-19 on the Australian economy and budget, with unemployment forecast to remain above pre-crisis levels for years to come.
The Monitor warns against the Morrison Government’s short-sighted “snap back” strategy and highlights that ongoing support for workers, vulnerable Australians and the broader economy will be critical to the recovery.
- Unemployment to remain above pre-crisis levels until late 2024; and
- Record budget deficits at seven per cent of GDP this financial year and the next.
Scott Morrison and Josh Frydenberg don’t have a plan to protect more jobs and ensure support is provided to workers, businesses and communities in the months and years ahead as we transition out of this crisis.
The report warns against the rapid withdrawal of support programs including JobSeeker and JobKeeper:
- “JobKeeper should be phased out rather than cut out. And ditto the increase in the unemployment benefit seen in JobSeeker”;
- “It will be critical to ensure the economy is at the right point in managing the public health crisis and the easing of restrictions so as to not create too large a shift from JobKeeper to JobSeeker because businesses can’t sustain reopening or afford to keep their employees”; and
- “There is an obvious case to keep JobSeeker at a higher rate than NewStart”
Australia entered this crisis from a position of economic weakness, not strength.
Weak growth, stagnant wages, record high household debt, falling business investment and record high underemployment were major economic challenges before the virus and are expected to hamper Australia’s recovery.
When the IMF, the Reserve Bank, and private sector forecasters have released their expectations for Australia’s recovery, the Treasurer has no excuse to withhold a full set of updated economic and budget figures and forecasts which should be released on Tuesday in lieu of a full Budget and updated in June.
Scott Morrison and Josh Frydenberg’s reluctance to level with the Australian people, to present a plan for what’s next or to include more workers in the otherwise-welcome support packages shows how little they understand about the challenges facing real people in the real economy.