with
SENATOR KATY GALLAGHER
SHADOW MINISTER FOR FINANCE
SHADOW MINISTER FOR THE PUBLIC SERVICE
CHAIR OF THE SENATE SELECT COMMITTEE ON COVID-19
SENATOR FOR THE AUSTRALIAN CAPITAL TERRITORY

Today the Reserve Bank Governor has highlighted the dangers of the Prime Minister’s “snap back” strategy, warning against a rapid withdrawal of support.

The Morrison Government’s lack of a plan for the months and years ahead means the downturn will be deeper than necessary, the unemployment queues longer, and the recovery more difficult.

A sudden withdrawal of support for the economy in the last week of September makes no sense at all.

Echoing calls from experts, the business community and Labor, the RBA Governor today said the Morrison Government should consider an extension or modification of the JobKeeper scheme to ensure that vulnerable workers and businesses continue to be supported where necessary.

Noting that the Government’s September deadline represented a “critical point” in Australia’s recovery, Governor Lowe highlighted the need for ongoing fiscal support:

• “right through the next year or so, the economy is going to need support from both monetary and fiscal policy.”
• “I'm hopeful that the fiscal support will be there for a long period of time.”
• “In the next little while, there's not going to be very much scope at all to use monetary policy in that way so I think fiscal policy will have to be used.”

In contrast to Josh Frydenberg’s reluctance to release updated economic forecasts, the Governor emphasised the importance of releasing economic forecasts at a time of uncertainty, arguing that it is in the public interest to support confidence and promote an informed public conversation about the downturn and recovery.

The less done to protect jobs and support vulnerable workers, business and communities in the coming months, the harder and longer the recovery will be.

Australian workers, businesses and communities need Scott Morrison and Josh Frydenberg to do a much better job managing the recovery than they did of managing the economy before the virus outbreak.