Deloitte Access Economics Business Outlook Report

Deloitte Access Economics has released its latest Australian business outlook report.

The report argues:

The best and fastest way to repair the economy is to keep the virus at bay so that we can rapidly open up.
Yet borders will remain closed for a time, so ‘opening up’ can only get us so far. And the Reserve Bank is already tapped out, so the task of repairing Australia falls more on governments than it’s ever done before.
That says more dollars are needed. How much more depends on our success against the virus and in opening up. But the recession is changing shape fast, so the nature, timing and dollars of support needs to change fast.
Some new types of spending will be needed, building on the recent infrastructure and HomeBuilder packages.
We also need to smooth transition timing and dollars: too much support ends at the same time. In some cases that may mean an earlier end, but in most cases it’ll be later. And we should phase support out where we can.
Some type of ongoing wage subsidy – a JobTweaker – will be needed too, limited to a rather smaller range of businesses (such as those tied to international borders). And the dollars per person may need to be lower too.
But wage subsidies gradually become less helpful the longer they’re used as emergency support. There are rising costs in simply keeping zombie jobs alive. That doesn’t say pull back overall spending support, but it does say this particular type of support should gradually fade in importance in our defence against the virus.
The complexity of exiting from this emergency is high. And things keep changing fast. So, over and above existing reasons to have higher unemployment benefits anyway, keeping JobSeeker stronger for longer will be vital in filling the cracks as emergency safety nets morph or disappear. We’re all in this together.