In an address on the state of the Australian economy, Commonwealth Treasurer Josh Frydenberg has outlined the government’s next steps in facilitating an economic recovery off the back of the COVID-19 crisis.
Mr Frydenberg claimed that the national cabinet’s recent decision to ease measures over three stages in the coming months would provide an immediate boost to GDP.
Treasury has forecast that approximately 850,000 Australians could return to work over the three-month period, boosting GDP by approximately $9.4 billion each month.
In the first stage alone, Treasury estimates that the lifting of COVID-19 restrictions could lead to more than 250,000 Australians returning to work, adding $3 billion in additional GDP.
However, Treasurer Frydenberg warned that such improvements could be undone if a second wave of the COVID-19 outbreak prompts the reintroduction of lockdown measures.
Mr Frydenberg claimed that if restrictions are reimposed, the national economy could lose $4 billion per week.
“This is the economic cost we will all bear if we fail to act,” he said.
As it stands, the Reserve Bank of Australia (RBA) is projecting a 10 per cent contraction in Australia’s GDP over the first half of 2020, against a rising unemployment, which the RBA anticipates could hit 10 per cent by the end of the June quarter.
However, Mr Frydenberg claimed that the government’s stimulus measures – which, when combined with the RBA’s term funding facility, total $320 billion – have helped soften the blow.
“We have put in place a comprehensive range of measures designed to keep people in jobs and to build a bridge to recovery,” he said.
“Our measures are working, protecting lives and livelihoods. We can be confident about our future.”
Mr Frydenberg concluded: “This virus will not defeat us. We must stay strong. We must stay together. We must maintain our resolve.
“The fighting Australian spirit will see us come through stronger than ever.”