The Recovery Book: What Australian Governments Should Do Now

by John Daley, Danielle Wood, Brendan Coates, Stephen Duckett, Julie Sonnemann, Marion Terrill and Tony Wood (Grattan Institute)

To help Australia recover from the COVID-19 recession, the Federal Government should inject $70 billion to $90 billion in extra economic stimulus, including revamping and extending JobKeeper.

Governments must prioritise ruthlessly. Long-term reforms – assuming they’re desirable – such as tax, industrial relations, and skills policy changes should be put on hold while governments tackle a huge agenda of urgent policies over the next six months.

The Federal Government should announce extra economic stimulus – including spending on social housing and shovel-ready maintenance and infrastructure projects – in or before the October Budget, with the goal of getting hundreds of thousands of Australians back to work and dragging unemployment back down to about 5 per cent by the middle of 2022.

JobKeeper should be expanded to include university staff, casual workers, and temporary migrants, and extended beyond September for businesses that are still in strife.

The permanent rate of JobSeeker should be increased by at least $100 a week, and Commonwealth Rent Assistance should be increased by 40 per cent.

The Child Care Subsidy should be raised to 95 per cent of costs for low-income households, to cushion the shock to family budgets as parents start paying for childcare again, and to reduce financial barriers for parents taking on more paid work.

There should be transport reforms to reflect likely changes to patterns of work and commuting in a ‘with-COVID’ world. These include congestion charging to help prevent roads in our capital cities clogging up, higher registration fees for larger cars than for smaller cars, more cycle lanes and paths, and a rethink of major project priorities.

Governments should refine health policies put in place over the past few months. Telehealth – telephone and video consultations with GPs and specialists – should be expanded, and private hospitals better used, especially to help clear the elective surgery backlog.

The Federal Government should fund a $1 billion, six-month tutoring blitz to help a million disadvantaged school students recover learning lost during lockdowns.

And there should be a rapid return of rigorous scrutiny and oversight of government spending and decisions, after parliaments were suspended at the height of the COVID crisis. The Federal Government should establish the promised national integrity commission.

This is a massive agenda, almost all needed in the next six months. After the recovery has been established, Australian governments will have the resources to focus properly on structural reforms to the economy and the budget.

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