Australia is paving the way for the world out of the COVID-19 induced recession, however the Organisation for Economic Co-operation and Development has warned the Australian government to consider a further stimulus to help reduce unemployment and boost incomes.
If the Coronavirus is kept under control without a ‘second wave’, then the local government is tipped to rebound by 4.1% in 2021.
“Governments must seize this opportunity to engineer a fairer and more sustainable economy, making competition and regulation smarter, modernising government taxes, spending and social protection,” said OECD chief economist Laurence Boone who also said that “The Australian government has been very efficient in shielding firms and workers”.
A recent Westpac consumer sentiment index surged of 6.4% for June, with credit and debit card expenditure now 5% higher than this time last year.
Treasury Secretary Steven Kennedy commented that the extent of the economic hit Australia had been dealt was heavily revised down and that unemployment would not be as bad as the recently predicted level of 10%.
“We entered this health and economic crisis from a position of economic strength which has enabled us, in the words of the OECD, to provide “massive macroeconomic policy support” with $260 billion or 13.3% of GDP in support for workers, households and business,” commented Treasurer Josh Frydenberg who confirmed that the government would provide all necessary support to aid continued recovery.
This is a brief summary of the article ‘Australia leads on economic recovery: OECD’ by Matthew Cranston and John Kehoe | AFR – The Australian financial review | Wednesday 10th June 2020.