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April 27, 2020

Lockdown and the Economy – Will restrictions be eased too soon?

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James Morris
Lock-Down and the Economy – Will restrictions be eased too soon?

The COVID-19 pandemic and the proceeding restrictions have long posed a difficult argument between economists, government and health professionals.  As the Government has announced an easing of some social distancing restrictions, Australians wait to hear when further enforcement’s will be eased as life as we knew it, begins to return.

Although Australia is currently enforcing lighter social distancing measures to neighbours New Zealand, hundreds of economists are urging the government against easing social distancing measures across the country in an open letter addressed to the Prime Minister with over 200 economist signatures.

Many argue that although the measures have come at a cost to economic activity, this is outweighed by lives saved, and a functioning economy cannot be achieved without first addressing the public health crisis.

The open letter calls the measures at the Australian border and within states and territories, a success in comparison to other countries which must not be squandered.

In a statement made by the IMF last week, Australia’s GDP is predicted to fall by 6.7 per cent in 2020, the worst fall since the Great Depression. However it is expected to rebound just as quickly, growing by 6.1 per cent in 2021.

Job loss is expected to spike with the Treasurer confirming that figures will reach 10 per cent in the next three months to June, from 5.1 per cent in February, following an estimated loss of 30,000 jobs. The introduction of the JobKeeper payment and other Government support stimulus measures, are implemented in an attempt to ease the impact.

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IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (QLD) Pty. Ltd. ABN 81 601 145 215. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (QLD) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Accounting (QLD) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (QLD) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Accounting (QLD) Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability limited by a scheme approved under Professional Standards Legislation.

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