Australian recovery requires an extended support package, more social housing: OECD

The Australian government should consider extending its financial support package and investing in education and training, says the OECD.

General view of the Victoria Market precinct in Melbourne.

General view of the Victoria Market precinct in Melbourne. Source: AAP

Australia's economic output could fall by 6.3 per cent this year if there's another wave of coronavirus cases, a key global economic body warns.

But even without a second wave, the Organisation for Economic Co-operation and Development says Australia's gross domestic product will still fall by five per cent this year, with severe and long-lasting consequences.

The federal government should consider what support might be needed once the existing measures ends in September, such as strengthening the social safety net and investing in energy efficiency and social housing, the OECD said.

Education, training and improving job search programs should be focused on getting unemployment down, it added.
Expanded loan guarantees and accelerated insolvency processes could result in a more dynamic recovery, the organisation said in its latest economic outlook.

States and territories have begun easing restrictions with no resulting surge in cases, so far.

But there's another week to go before it's known if the virus spread at mass anti-racism protests across the country last weekend.

The government has said it's unlikely broad restrictions will be applied if there's another outbreak of cases, and its strategy will focus on local containment areas.

The OECD said a second outbreak could be smaller in Australia than elsewhere, due to the nation's geography and continued restrictions on international travel.
The report acknowledged the virus had hit Australia's economy at a time when investment was already weak and the impact of severe drought and devastating bushfires were being felt.

This led to a 0.3 per cent drop in growth in the March quarter, prompting the government to warn Australian is now in a recession given another fall is expected in the June quarter data, due later this year.

An economic recovery could be faster if consumer sentiment rapidly rebounded, the OECD said.

But a key risk to its outlook is high levels of household debt, as well as a downturn in the housing market.


Share
2 min read

Published

Updated



Share this with family and friends


Get SBS News daily and direct to your Inbox

Sign up now for the latest news from Australia and around the world direct to your inbox.

By subscribing, you agree to SBS’s terms of service and privacy policy including receiving email updates from SBS.

Download our apps
SBS News
SBS Audio
SBS On Demand

Listen to our podcasts
An overview of the day's top stories from SBS News
Interviews and feature reports from SBS News
Your daily ten minute finance and business news wrap with SBS Finance Editor Ricardo Gonçalves.
A daily five minute news wrap for English learners and people with disability
Get the latest with our News podcasts on your favourite podcast apps.

Watch on SBS
SBS World News

SBS World News

Take a global view with Australia's most comprehensive world news service
Watch the latest news videos from Australia and across the world