The September labour force data show the impact of the recession on jobs, hours worked and unemployment. It is bad news. Depressing in many ways to realise that there are 937,400 Australians unemployed, a further 1,538,800 underemployed and that since the onset of Covid-19, the workforce participation rate has dropped by 1.3 percentage points as people have given up looking for work.
COVID-19 has sparked massive changes in banking and finance, not least because of the deep recession impacting the economy.
Among the changes that have been witnessed in finance, the so-called responsible lending laws have been relaxed to make it easier for a borrower to get a loan. In addition, around $35 billion has been withdrawn from superannuation accounts as the government has encouraged people to pull out cash from their superannuation savings to cover the costs of being unemployed or working fewer hours during the COVID-19 recession.
Economist Stephen Koukoulas says the economy needs money poured into private sector pockets so they can spend, invest and most importantly hire.
“So I would be looking at policies that make sure the economy is growing strongly enough so that in a reasonable amount of time we get that unemployment rate back to where it was pre-Covid,” Mr Koukoulas told Sky News.
August’s unemployment rate came in below expectations at 6.8 per cent, largely propped up by wage subsidy schemes which mask the actual rate. “It was only ten months ago that it was five per cent, it’s difficult and a lot depends on how the health crisis goes. “But for here and now it’s about jobs.”
Market Economics’ Stephen Koukoulas says immigration intake has “slowed to a trickle” and with it much of the demand for new houses and infrastructure.
Economist Stephen Koukoulas says “there is no confidence at all” in any projections about the unemployment rate amid the coronavirus pandemic.
Australian economist Stephen Koukoulas says the Reserve Bank of Australia’s emergency cash rate cut would help businesses and homeowners already “well off economically in this crisis”.
Central banks and governments around the world are scrambling to keep economies afloat as the coronavirus contagion sweeps across the globe. In Australia the RBA is poised to announce its next move on Thursday. Economist Stephen Koukoulas speaks to ABC News.
Anyone can have a ‘good time’ if they borrow and spend like the proverbial drunken sailor, but as we all know, such action is not sustainable. It cannot go on forever given that one day the money will run out and the debt will have to be repaid.
Our expert economist and social commentator Stephen Koukoulas explores the question of how sustainable is our super with an aging population.
Amid the economic fall-out from the drought and bushfires and the unfolding problems associated with the coronavirus, the Australian housing market is seeing further strong price gains, a tight rental market and a turning point in new construction.
Things are brewing in the housing market: Having been hit hard under the weight of a property glut, record low wages growth, tighter credit from the banks and the Reserve Bank refusing to cut interest rates despite troubling economic conditions, house prices around the bulk of Australia fell sharply from around the middle of 2017 through to the middle of 2019.
A Labor win in the election will mean big changes in a number of key policy areas – negative gearing rules will change as will refunds of franking credits and capital gains tax concessions.
This will have important implications for investors, financial planners and the economy. Investment in new dwellings is likely to get as boost, as will shares in companies not paying the previously appealing 100% fully franked dividends.
The election looms large and which ever side wins, they will be confronted with an economy growing below trend, low inflation and a global backdrop where conditions are weakening.
Will the promises being made now need to be refined?