ENTERING RECOVERY PHASE
The nation sees a surge in COVID-19 cases and deaths, along with a growing budget deficit and unemployment rates.
- On 23 July, Australia reported its highest daily number of COVID-19 deaths in 3 months, as new infections continue to climb in its two most populous states – New South Wales and Victoria.
- Border and movement restrictions have been reintroduced, although in varying degrees across the different states and territories.
- An elimination strategy similar to New Zealand’s is being contemplated. However, the Federal Government is concerned that elimination would be too costly and lead to extra job losses. It could also provide a false sense of security and encourage people to be more complacent about the ongoing risks of an outbreak.
- Following 28 years of unbroken economic growth, Australia is set to experience 2 consecutive years of contraction for the first time since the 1930s. The economy is believed to have shrunk by 0.25% in 2019-20, and will contact a further 2.5% in 2020-21. The budget swung into a massive deficit of A$86.8 billion in the year-ended June 2020 and the shortfall is expected to climb to A$184.5billion in 2020-21.
- The pandemic has sent unemployment to 7.4% – the highest in over two decades – and is expected to peak at 9.25% by the year end.
- The JobKeeper scheme was rolled out to support struggling businesses, by providing wage subsidies (A$1,500 a fortnight) to help keep staff employed. Intended to end by September 2020, this scheme has since been extended till 28 March 2021 – but the subsidy will be reduced to A$1,200 a fortnight in September 2020 and A$1,000 a fortnight in January 2021. Likewise, extra welfare benefits for the unemployed will also be continued but at a reduced amount.
- The Federal Government plans to increase stimulus spending on the two income support programmes to around A$86 billion.