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First rollbacks will bring 250,000 jobs, $3b per month back into economy

Australia’s first tentative steps to lifting coronavirus restrictions will send a quarter of a million people back to their jobs and add more than $3 billion to the economy.

May 12, 2020, updated May 12, 2020
Treasurer Josh Frydenberg. (Photo: Lukas Coch/AAP PHOTOS)

Treasurer Josh Frydenberg. (Photo: Lukas Coch/AAP PHOTOS)

Treasury estimates that by the time all states reach the third stage of the progressive reopening, roughly in July, the economy will be growing by $9.4 billion a month.

Under that third stage, people will be allowed to gather in groups of up to 100 and most businesses should be able to reopen.

The Government estimates this will bring more than 850,000 Australians back to work than at present.

This figure includes people who have been stood down but are receiving the JobKeeper wage subsidy, who aren’t counted among official unemployment estimates.

Treasurer Josh Frydenberg will detail the boost to each state in an economic statement to parliament on Tuesday.

But he will warn going backwards on restrictions if the virus starts to spread again will cost NSW $1.4 billion, Victoria $1 billion and Queensland $800,000 a week.

He will also reflect on the sobering data counting the economic impact of the virus.

Treasury has predicted unemployment will spike at 10 per cent in June while the Reserve Bank expects it to still be at 8.5 per cent in June next year.

Nevertheless, the Government insists the JobKeeper payment and temporary doubling of the unemployment benefits to $1100 a fortnight will still end in September.

“Rebuilding consumer and business confidence will be key as the nation’s finances can only be sustained by a strong and growing market-led economy,” Frydenberg will say, according to extracts from his speech.

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“Australians know there is no money tree. What we borrow today, we must pay back in the future.”

Frydenberg was to have delivered his second budget on Tuesday but it has been pushed back to October.

Shadow Treasurer Jim Chalmers is expected to respond to the economic statement by saying it is no substitute for the proper policy program of a budget.

“Australia needs an economic plan – a plan for when the economy doesn’t snap back on the Prime Minister’s political timetable,” his draft reply says.

“A plan that doesn’t withdraw support from the economy too early or too suddenly, in a way that cruels the recovery.”

-AAP

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