On Tuesday, the 2020 budget will be brought down. It will show a huge deficit for this financial year and massive government spending, aimed at promoting economic recovery and reducing unemployment. In the wake of COVID, the Coalition’s usual preoccupation with “debt and deficit” has become very yesterday.
On this week’s Politics podcast, we speaks with Chris Richardson, partner at Deloitte Access Economics. Deloitte’s Economics Budget Monitor, released this week, favoured bringing forward the tax cuts as one measure to stimulate the economy and expected the deficit to be holding up better than earlier thought.
Like economists in a recent survey Richardson says the budget should prioritise a permanent boost to JobSeeker and fund more social housing:
“The least noticed thing about this crisis is how geographically specific it is,” he says.
“The job losses in Australia have been far and away the biggest where unemployment rates, suburb by suburb, town by town, out in the bush, were already the highest. … The areas that were struggling are now struggling a lot more. The areas that weren’t struggling haven’t been that hard hit.”
“And one real advantage of boosting unemployment benefits. It’s probably the single most targeted regional spend you can do in Australia at a time when that is needed most.”
And on social housing: “Think of what this virus has done all around the world. It’s found the weakest link in every nation.
"It’s travelled through the political system, the political divide in the US, it’s travelled through the migrant workers, construction workers in Singapore.
"In Australia, it showed up or could have shown up through our very low unemployment benefit… And social housing. You saw those towers locked down, as the virus got away on us in Melbourne. And again, both social housing and unemployment benefits. That’s money that would be spent. It makes it good stimulus.”