At this point, it is likely that most of us have only the barest sense of how bad this recession is going to get. A remarkable fact is that, as a result of the government payments to date, Australians at times during this crisis have had higher incomes, on average, than we did before this crisis. But as more businesses shut down, more jobs are lost, more debts are called in and JobKeeper and JobSeeker are reduced – all sucking money out of the economy – more of us will personally experience the pain of this recession. The government is being widely urged to spend more, including by the Reserve Bank. Instead, partly as a result of the cuts and exclusions, and the deterioration in Victoria, the economy next year is expected to be smaller than it was in 2019. Up to 400,000 more people may lose their jobs by Christmas.
The government’s debt answer is nonsense. The line did not have to be drawn where it was drawn and, with the economy still deteriorating, the government has made the decision to claw back spending at the cost of jobs and growth – the very goals it had set for itself. The obvious question, to which no reasonable answer has yet been provided, is why?