Today’s update by the Reserve Bank highlights the profound impact of the virus on the economy and workers, with the unemployment rate expected to hit double digits and remain elevated for some time.
The RBA’s expectations of high and persistent unemployment is not a sign the economy will miraculously “snap back” to normal on the six-month timeframe Scott Morrison has specified.
Today the RBA Governor outlined his current expectations that unemployment is likely to be around 10 per cent by June, and remain above 6 per cent over the next couple of years.
Over the first half of this year, the RBA is expecting national output to fall by 10 per cent, and total hours worked to decline by 20 per cent.
The RBA Governor also highlighted that the unemployment rate would have been “much higher” without the wage subsidy, which was called for by Labor and initially dismissed by the Morrison Government.
When unemployment spikes in the next few months remember hundreds of thousands of job losses could have been prevented if the Treasurer had used his powers to include more workers in the JobKeeper program, which he could do with the stroke of his pen.
Labor appreciates the ongoing engagement with the Reserve Bank and the financial sector, as well as their coordinated approach to supporting liquidity, functioning of markets and the economy during this challenging time.
The RBA’s update is welcome and should prompt the Morrison Government to reconsider their decision to withhold a full set of updated economic and budget figures and forecasts, which should now be released in the next month in lieu of a full Budget.