The Government’s second economic stimulus package in response to the Coronavirus is a package of positive small short-term measures but provides no long-term secondary benefit.
However, better measures will also need to be put in place to ensure the stimulus gets out more quickly. Furthermore, there is a real risk effected employees will not receive the benefits going directly to business.
“The Government’s aim is ‘targeted, temporary and scalable’ where they should be ‘structural, sustainable and scalable,” said Dr. Richard Denniss, chief economist at the Australia Institute.
“This second stimulus aims to funnel money out the door, with little thought as to what value for money or secondary benefit will be derived.
“The Government has not grappled with the economic impacts of the pandemic, they may understand the health impacts but they have fundamentally misread that the Australian economy coming out of this crisis will be very different,” Dr. Denniss said.
“We have seen nothing long-term, no direct employment, nothing lasting, and nothing that indicates the Government thinks at the end of this Australia will be any different,” said Matt Grudnoff, senior economist at the Australia Institute.
“For the Government to claim that the stimulus package is worth 10% of GDP is misleading. $125 billion of the Government’s claimed $189 billion stimulus is aimed at ensuring there is enough credit in the financial system for those that want to borrow — this is not fiscal stimulus. Ensuring the proper functioning of the financial markets is important work but it is very different to putting new spending power in the hands of households and business.”