While all of the focus has been on the $300 billion of economic stimulus deployed by the federal government – equivalent to some 16% of GDP – it is easy to forget that the state governments have launched stimulus packages of their own.
The Grattan Institute has done the sums and found that the states have announced around $15 billion of stimulus measures, ranging between 0.3% (ACT) to 2.8% (TAS) of gross state product (GSP):
About 28 per cent of the spending by the states and territories is on hospitals and health care, including Intensive Care Unit (ICU) capacity, COVID-19 testing, ventilators, medical equipment, and respiratory clinics.
46 per cent of the money will go to supporting business, most of it via payroll tax relief. All six states will waive the levy for select sectors.
Another 14 per cent is destined for households. This includes rebates and freezes on household fees and charges, as well as money for retraining and redeploying workers who would otherwise have lost their jobs.
Other initiatives include direct support for employment, bringing forward of capital and maintenance expenditure, and support for community groups and charities.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
