Experts still tip a recession possible
ECONOMISTS maintain a recession is still possible despite the Federal Government’s $17.6 billion economic stimulus package.
The measures announced by Prime Minister Scott Morrison include giving 6.5 million welfare recipients and pensioners a $750 payment, and automatic grants for small and medium-sized businesses of between $2000 and
$25,000.
AMP Capital senior economist Diana Mousina said the measures were decent, but predicted they would not be enough.
“The key question is – will this stimulus be enough to ward off an Australian recession? We think no,” she said.
Fewer Chinese tourists and students, along with damage from the summer bushfires, would hurt a weak economy, Ms Mousina said.
Commsec chief economist Craig James said the stimulus was a good first step but would not supercharge the economy and did not guarantee that it would not slip into recession.
But business leaders were upbeat about the stimulus.
Australian Retailers Association executive director Russell Zimmerman was confident the cheque recipients would spend, rather than save, the money.
“I believe these are people living week to week and can’t afford the simple things in life, like clothing and footwear,” he said.
Small businesses will get up to $7000 each quarter for apprentices as a wage subsidy.
Meanwhile, the Government will also spend $700 million over four years to expand the instant asset writeoff for businesses.
The threshold will be raised from $30,000 to $150,000 and expand access to businesses with an annual turnover of up to $500 million, from
$50 million previously.