Hard economic yards to come
WHILE Australia has done well at avoiding the health impact of coronavirus, the economic ravages will be much harder to escape.
The most significant statistic this week was not the 7 per cent official unemployment but the 1.6 million people on the JobSeeker double-dole, and the 3.5 million on the JobKeeper wage subsidy for enterprises that have lost at least a third of their business.
That’s about 40 per cent of the workforce currently sustained by taxpayers – and when this sugar hit ends, it is only then that we will really know how deep and long this recession is likely to be.
For anyone under the age of 45, this is new territory.
Having only known the economic good years, and with low saving rates, and the world’s second highest level of household indebtedness, what’s coming will be a massive shock to the system.
To his credit, Scott Morrison never wanted the shutdown to be as severe as the states insisted on making it; he never wanted schools closed and state borders shut.
For over a month now, he’s been telling the premiers that everything should be opened up.
But even when our domestic economy is fully reopened, there’s overseas education worth $32 billion a year (or about 2 per cent of GDP); and international tourism, worth $45 billion a year (or about 3 per cent of GDP), that’ll take years to recover.
Lots of tough decisions are needed: on more baseload power and new dams so manufacturing and agriculture can flourish.
And on economic reform.
Full marks so far PM, but the real work is only beginning.