Today’s statement by the Reserve Bank highlights the significant uncertainty Australian businesses and workers are facing, and the need for ongoing economic support as the virus outbreak continues.
According to the RBA, “the nature and speed of the economic recovery remains highly uncertain. Uncertainty about the health situation and the future strength of the economy is making many households and businesses cautious, and this is affecting consumption and investment plans.”
The Governor reiterated that “The Australian economy is going through a very difficult period and is experiencing the biggest contraction since the 1930s” and that “It is likely that fiscal and monetary support will be required for some time.”
The Reserve Bank’s comments highlight the danger of the Morrison Government’s plan to suddenly withdraw support for the economy in the last week of September.
Scott Morrison and Josh Frydenberg’s decision to keep the JobKeeper review secret is adding to uncertainty in the business community and is a handbrake on the recovery.
The recent virus outbreak in Victoria and the necessary new restrictions make it even more important that the Government clarifies the future of JobKeeper.