Having delivered a lousy stall speed economy into an historic shock, Recessionberg is gone. Enter Scotty from Marketing, via Paul Kelly:
Scott Morrison has taken to heart the Treasury advice from secretary Steven Kennedy. “We are not interested in solving the wrong problem,” the Prime Minister says. Dead right. He says the global threat is “different” from 12 years ago. This time the disruption originates with Chinese tourists and students not travelling, factories being closed, services being scaled back and trade being ruptured — hence threats to our travel, tertiary education, construction and many other businesses. But there is no problem with capital, no issue with bank balance sheets.
Australia’s response, Morrison said yesterday, will be “targeted, measured and scalable”. He doesn’t use the word “modest” any more. He says the recovery may be U-shaped, not V-shaped, meaning a more protracted delay before the economy bounces back. In short, the outlook is deteriorating. That means the government’s spending response will be larger and the economic policy change more significant.
