To me, really big measures are needed and this JobKeeper policy meets that need.
The government’s main focus at the moment appears to be to strengthen the safety net designed to help individuals and families impacted by COVID-1.
The RBA was obliged to cut rates to 0.25%. It is right that monetary policy should be working in a co-ordinated manner with the government’s fiscal stimulus packages.1
KPMG modelling in a report published today estimates Australian GDP would be at least 0.9 percent lower in 2020 because of the COVID-19 pandemic.
Experience has taught us that fiscal stimulus measures need to be targeted, timely and temporary, and these form three of the Federal Government’s seven principles.
Despite the volatility on global and local markets, the COVID-19 pandemic is not like the GFC. It’s in fact very different and so are its effects.
As widely anticipated the GDP growth figure release today was 0.5 percent – it is modest but will begin to look impressive by the time we see the Q1 2020 figures.
Last month it was a 50-50 call on whether the RBA would reduce the cash rate. This month it was a lot clearer – rates were rightly cut by 0.25 percent today and there will probably be another 0.25 percent cut next month.
2020 is a Leap Year and the extra day’s GDP will add around $5.2 billion to the economy for this year’s national accounts.