Even with the amazing success Australia is achieving in the fight against the virus, the oldest problem in economics is that unemployment goes down much slower than it goes up. Subject to the important caveat that forecasts are currently subject to really wide bands of uncertainty, Deloitte Access Economics estimates that national income will fall 1.8 percentage points ($35 billion) below the official projections in MYEFO in 2019-20, followed by a jaw dropping shortfall of just under $200 billion (or 10.8 percentage points) in 2020-21.
Even worse, the recovery thereafter may well be slow:
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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.
