Australians need to return to their offices and jobs need to boost the economy, with lockdown costing the country $4 billion each week, Treasurer Josh Frydenberg will say today.
“We need to get people back into jobs and back into work,” Mr Frydenberg will tell the National Press Club, while confirming Australia is on track to enter its first recession since the early 1990s.
“Some of the hardest-hit sectors, such as retail and hospitality, are among the largest employers, collectively employing more than two million people.
“History shows that the longer people are unemployed, the harder it is to get a job.”
A closed Donut King store in west Melbourne on Monday. Treasurer Josh Frydenberg will say on Tuesday that Australians need to get back to work to boost economic productivity
Treasury Department estimates predict that the country’s GDP will fall by 10 to 12 percent by the end of June – a decline that would mean a $50 billion drop in economic activity in a single quarter.
But Mr Frydenberg said that number would double if Australia’s restrictions mirrored the strict eight-week lockdowns like those introduced in Italy.
“That was the cliff we were standing on,” he said. “This would have placed an enormous strain on our financial system through increased balance sheet losses, widespread company closures, higher unemployment and household debt.
“If these restrictions were tightened even further, similar to the eight-week lockdown in Europe, the negative impact on GDP could double to 24 percent, or $120 billion, in the June quarter.”
Mr. Frydenberg will also credit the $130 billion JobKeeper program for mitigating the impact on the economy.
He will point to figures from the early 1990s – when it took seven years for unemployment figures to return to pre-recession levels – to underscore the need to minimize the long-term economic impact of the pandemic.
A deserted entrance to a David Jones store in Melbourne’s western suburbs pictured Monday. Australia is on course to enter its first recession since the early 1990s, the Treasurer will confirm on Tuesday
Treasurer Josh Frydenberg will tell reporters Tuesday that overall consumption has fallen 19.5 percent year-to-date
In Tuesday’s speech, the treasurer will support the national cabinet’s decision to bring forward its decision to ease coronavirus restrictions by a week to this Friday.
“For every additional week the current restrictions remain in place, the Treasury Department estimates that we will see a nearly $4 billion reduction in economic activity due to a combination of reduced labor force participation, productivity and consumption,” Mr. Frydenberg will say.
He will also say that total spending in the leisure, accommodation and food industries has fallen by up to 70 percent.
A woman wearing a protective mask on George Street in Sydney on Monday due to the coronavirus outbreak
Total consumption has fallen 19.5 percent year-to-date, according to data from National Australia Bank, his speech said.
New Zealand Prime Minister Jacinda Ardern meets with Australia’s national cabinet on Tuesday to discuss resuming travel between the two countries.
Ms Ardern is also keen to discuss the COVIDSafe app as New Zealand plans to develop a similar version of the contact tracing platform.
New Zealand Prime Minister Jacinda Ardern will attend Australia’s cabinet meeting on Tuesday
As well as hearing from Ms Ardern, the meeting of state and territory leaders will consider how to ease coronavirus rules ahead of the national baseline restrictions expected to be eased on Friday.
New Zealand and Australia have had similar success in tackling the coronavirus – although New Zealand has enforced tougher restrictions.
On March 25, the country went into full lockdown, shutting down all restaurants and construction companies and preventing online deliveries except for essential supplies.
On April 27, this was eased to levels similar to those in Australia’s eastern states.
On April 27, Home Secretary Peter Dutton floated the idea of opening Australia’s borders with New Zealand as a “logical first step”.
But when it comes to opening borders to other parts of the world, like the US or the UK, he warned: “That will eventually come to an end.
