It is no longer news that Covid-19 has affected the Australian economy significantly. The questions we need to ask ourselves are the following:
- What actions can be taken to strengthen Australia’s economic recovery and;
- What opportunities exist for the local economy in times ahead?
According to Professor Ian Harper AO, Dean of Melbourne Business School, the Job Keeper program is an excellent way of ensuring as many people as possible remain connected to the workforce. He believes the program will need to be extended or tapered to ensure this connection is maintained, which will minimise the number of people losing their jobs, thereby maintaining business activity and consequent economic activity.
Danielle Wood, National President of the Economic Society of Australia, suggests the next phase in the wake of declining Job Keeper and Job Seeker payments will be stimulus designed to boost demand and get the economy moving again. This may need to be more imaginative, given the novel nature of the current crisis.
One area Ms. Wood considers potentially beneficial is government provided tutoring to disadvantaged students, which is likely to create jobs for the new graduates, particularly female graduates, who are highly likely to spend the additional money paid to them, thereby stimulating economic activity.
In terms of opportunities, Professor Harper anticipates opportunities arising in domestic manufacturing, which have not been seen in Australia for some time. It is likely that domestic self-sufficiency may increase in the face of declining international reliance as a result of companies having experienced costly disruptions to global and complex supply chains during the pandemic.
Further opportunities may arise in the area of renewable energy, resulting from the realisation that the country needs to become less dependent on fossil fuels for both environmental and security reasons. It seems that Australia is well positioned to recover from the current crisis and may emerge strongly with renewed vigour and opportunity.
For personalised advice on your finances, contact the Superannuation Advice Australia team.