Extracts of Treasurer Josh Frydenberg’s speech at the National Press Club on May 5 were obtained by The Australian on May 4. The extracts revealed that Frydenberg was due to report that Australia’s economy had shrunk between 10-12 percent this quarter.
According to the extracts, the fight to protect Australia from the CCP (Chinese Communist Party) virus, commonly known as novel coronavirus, cost the Australian economy $50 billion (US$32.3 billion).
The extract also included a forecast that Australia’s lockdown might cost Australia $120 billion in the June quarter.
The “reduction in economic activity from a combination of reduced workforce participation, productivity, and consumption” will cost Australia $4 billion (USD 2.4 billion) a week if the current restrictions stay in place, according to the extracts.
The treasurer’s speech extract said: “These falls in economic activity together with the employment effects of the health restrictions have seen Treasury forecast that the unemployment rate is likely to double.”
According to AAP, the treasurer is also expected to note in his address that the economy may get worse before it gets better.
Further, Frydenberg was due to say: “Notwithstanding Australia’s success to date on the health front, and the unprecedented scale and scope of our economic response, our economic indicators are going to get considerably worse in the period ahead before they get better.”
The sectors hardest hit by the lockdown have been the retail and hospitality industries, that according to the government statistics employed nearly 2 million people in Australia in 2019.
To offset the economic shock, the federal government on March 31 announced (pdf) it had spent $320 billion (USD$206 billion) in stimulus packages amounting to 16.4 percent of GDP.
However, the treasurer is also reported to note that Australia is lucky that its lockdown measures have not been more severe.
According to extracts from his speech, Frydenberg will tell the National Press Club: “Significant sectors of our economy like agriculture, mining and construction have been able to adapt to the new health restrictions and in most cases continue to operate.”
The federal government is expected to announce easing lockdown restrictions on May 8.
“Australians have earned an early mark through the work that they have done, and that decision will now be made on next Friday. And we’ll be meeting twice over the course of the next week to ensure that we can work through the many things that have to be resolved in order to make those decisions,” Morrison said.