The IMF is forecasting a bigger hit to Australia’s growth than comparable countries this year, and high unemployment over the next two years, despite substantial and welcome support that has passed through the Parliament.

In its World Economic Outlook, the IMF forecasts a 6.7 per cent contraction in the Australian economy in 2020, with unemployment expected to rise to an average of 7.6 per cent in 2020 and 8.9 per cent in 2021.

The IMF doesn’t share the Prime Minister’s assumption that employment in Australia will miraculously “snap back” to normal on his six-month timeframe.

The Outlook highlighted that the IMF expects the Australian economy to be smaller at the end of the 2021 recovery, with elevated unemployment, than it was before the Coronavirus hit.

Expectations of persistently high unemployment is a sobering reminder of the devastating economic impacts of this diabolical health crisis, and highlights the need to protect as many jobs as possible now.

The IMF says countries should rely heavily on measures like wage subsidies, which Labor called for and supported in the Parliament, and has warned against withdrawing support too quickly in a way that could jeopardise the recovery.

Unemployment will be higher than necessary and persist for longer than necessary if the Treasurer doesn’t exercise his powers to include more casuals and other workers left out of the JobKeeper scheme.

Australia entered the crisis from a position of relative economic weakness not strength, including record high underemployment before the worst of the virus outbreak, which makes much-needed support even more urgent.

The IMF had already downgraded Australian growth expectations before the virus hit. 

Before the bushfires and before Coronavirus, quarterly growth had slowed in the December quarter, wages were stagnant, household debt was at record highs, business investment was weak, and living standards were going backwards.

Scott Morrison and Josh Frydenberg’s denial about the weakness in the domestic economy forced the Reserve Bank to slash interest rates to record lows even before this crisis began.

When unemployment spikes in the next few months remember hundreds of thousands of job losses could have been prevented if the Treasurer picked up his pen and included more workers currently left out and left behind.