Frydenberg tips vaccine bounce

JOSH Frydenberg says there is “light at the end of the tunnel” for Aussie families, after Deloitte painted a rosy economic picture before the arrival of a COVID-19 vaccine.

Deloitte Access Economics has released its business outlook for December, finding unemployment would fall much faster than initially feared.

The report said although Australia had made a number of errors in combating COVID-19, it was one of five countries – alongside Taiwan, China, Vietnam and New Zealand – “very well placed” to recover.

Treasurer Josh Frydenberg said the report showed the economy was “in recovery mode”.

“(The) Australian economy is bouncing back strongly. That’s what the Deloitte report said today, that the Australian economy is outperforming expectations,” he told reporters on Monday.

“There will be challenges. It will be difficult, as we see globally as many countries struggle with the health and the economic impacts of COVID-19.

“But we also know that Australia is so well positioned for that economic recovery.”

But Deloitte warned wages and price gains would “keep bumping along the bottom for some time”, while elevated unemployment would “keep inflation and interest rates on a tight leash”.

Labor treasury spokesman Jim Chalmers said stagnant wage growth would prevent the “patchy and uneven” recovery from becoming fully fledged.

“Let’s have a bit of perspective on this Deloitte report today,” he said on Monday.

“Any encouraging signs are welcome, but it won’t be the right kind of recovery without a recovery in job security, and a recovery in wages as well.

The report predicted unemployment would fall to 5.5 per cent by mid-2030, down from its current rate of 6.8 per cent.