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Australia’s political heads are being urged by a leading think tank to seize the opportunity to deliver long-term economic and social benefits as the economy recovers from the COVID-19 pandemic.
A recent report from the Committee for Economic Development of Australia (CEDA) says the government should focus on investments in social infrastructure such as child care, aged care and housing as top priorities.
CEDA’s chief executive Melinda Cilento said the pandemic has taught Australians to be bold and resilient.
“Australia remained resilient by taking bold steps on health and the economy – 2021 will be no different,” she said.
“A key message from the economic contributors to this report is that despite periodic outbreaks of the virus, confidence and economic activity has been incredibly resilient.”
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Ms Cilento said a rapid and widespread vaccine rollout will be crucial to maintaining recent momentum.
“In 2021, everything will flow from this, especially as governments wind back income support such as JobSeeker and JobKeeper that kept much of the economy afloat last year,” she said.
“The Government should not be afraid to provide continuing support to the hardest-hit industries and individuals to support jobs and incomes, ensuring that the recovery is not derailed,” she added.
Ms Cilento added she expects economic growth and jobs to dominate the policy debate this year, but added that climate change should also be front of mind given the global policy shifts driven by the new Biden administration in the US.
The report added that job inequality should also be addressed, with lower-paid roles bearing the brunt of job losses.
“To address inequality in Australia, a permanent increase to the rate of JobSeeker is long overdue,” Ms Cilento said.
“It will do much to support the recovery, and as Reserve Bank of Australia Governor Phillip Lowe has said, it is a fairness issue.”
Meanwhile, Treasurer Josh Frydenberg has refused to be drawn on a report that the dole will be rolled into a single payment for all unemployed Australians, junking multiple supplements and subsidies.
The $150-a-fortnight coronavirus supplement for eligible welfare recipients will end in late March, prompting fears that unemployed Australians will be forced to again live on $40 a day.
This comes as the Reserve Bank of Australia retained the official interest rate at current levels, flagging further assistance will be needed for the country’s economic recovery out of the coronavirus pandemic.
In its monthly monetary policy statement released on the first Tuesday of every month, the RBA said it would keep the cash rate at 0.1 per cent while global economic output is hindered by COVID-19.
RBA Governor Philip Lowe said a return to normal economic measures are “still some way off”, with the central bank to continue its support for the foreseeable future.
“The current monetary policy settings are continuing to help the economy by lowering financing costs for borrowers, contributing to a lower exchange rate than otherwise, supporting the supply of credit needed for the recovery and supporting household and business balance sheets,” Dr Lowe said.
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