Earnings shock building fast

Advertisement

Via the excellent Damien Boey at Credit Suisse:

The Australian government has pledged an additional $130 billion over the next 6 months in wage subsidies. Eligible firms will be paid $1500 per fortnight to subsidize workers stood down in the wake of COVID-19 shutdowns.

The stimulus comes on top of the second $66 billion stimulus package, and the first $17.6 billion package. In total, fiscal stimulus will be worth $213.6 billion, equivalent to 10.6% of annual GDP. This is an unprecedented amount of deficit spending. Importantly, the stimulus package is incredibly front-loaded, meaning that over the next 6 months, the annualized impact could be nearly double.

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:
Cancel at any time through our billing provider, Stripe
About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.