Robert Lowe, governor of the Reserve Bank of Australia (RBA), said on April 21 that Australia should not expect to “return quickly to business as usual” after the CCP virus ended.
Discussion on Australia’s post-pandemic economic future became rife following the RBA’s prediction that the country was experiencing one of the worst economic episodes since the Great Depression.
The CCP (Chinese Communist Party) virus, commonly known as novel coronavirus, is likely to cause the “… biggest contraction in national output and income that we have witnessed since the 1930s,” Lowe said in a speech.
In summary, the national output, or gross domestic product, is likely to fall 10 percent over the first half of 2020, with most of the decline occurring in June.
Total hours worked is likely to decline by around 20 percent over the first half of the year. By June, unemployment nationally is expected to reach 10 percent.
Even if CCP virus restrictions are lifted, Lowe conceded consumption habits would change and there would be more cautious spending.
Lowe said the best way for Australia to rebound from the repercussions of the pandemic was to embark on a growth and productivity agenda. He encouraged Australians to capitalise on the “cooperative spirit” shared during the virus outbreak.
“A strong focus on making Australia a great place for businesses to expand, invest, innovate, and hire people is the best way of extending the recovery,” he said.
Treasurer Josh Frydenberg said the government was on the same page as the RBA and understood the need for widespread reform.
Frydenberg did not rule out reform in the areas of tax, deregulation, and industrial relations.
Speaking to the Australian Financial Review on April 22, he re-emphasised the importance of passing the “Ensuring Integrity Bill” which would give courts the power to deregister unions or disqualify officials from unions.
AFR also reported that he said, “We do have an uncompetitively high rate at 30 cents in the dollar.”
Jennifer Wescott, president of the Business Council of Australia echoed the need to reform the tax system saying it needed to be more competitive to attract overseas investment.
“We have one disadvantage which is a tax rate that is so much higher than everywhere else in the world,” she said.
Federal Opposition Labor Leader, Anthony Albanese responded to the government’s comments on Twitter saying, “What I hear from the government is just code for, “We’re going to go back into continuing to attack trade unions, to attack wages and conditions for working people.”
The Government has been quietly making it easier for bosses to cut people’s pay, penalty rates and leave entitlements – all with just 24 hours’ notice.
Working people have been getting us through this crisis.
We need a plan to help them – not one that will hurt them. pic.twitter.com/mfW3cqF6yQ
— Anthony Albanese (@AlboMP) April 22, 2020
Shadow Treasurer, Labor’s Jim Chalmers wrote on Twitter that Australia should not return to the “old narrow ideological obsessions … which have failed to create enough good, well-paid secure jobs in the past.”
We’re up for a big conversation about what Australia looks like after this crisis, but we don't want it to focus just on a return to the old narrow ideological obsessions of the Government which have failed to create enough good, well-paid secure jobs in the past #auspol #ausecon pic.twitter.com/A9Xj6kfgMh
— Jim Chalmers MP (@JEChalmers) April 23, 2020