Australia’s Budget Is Built on Pure Hope

How a country assumed its way out of a crisis

The Sydney Opera House set on a bright orange sky at dusk
The Sydney Opera House set on a bright orange sky at dusk
Photo by Liam Pozz on Unsplash

So long as the state governments can hold the economy hostage, the federal government has little choice but to keep writing checks to the households and businesses affected by closures and the severe downturn in economic activity.

The Australian government’s budget assumes that restrictions will be eased gradually, to be accompanied by an improvement in confidence and labor market conditions. The unemployment rate is forecast to peak at 8 percent in the December quarter due to internal and national border closures, before falling to 6.5 percent in the June quarter of 2022.

Writer and analyst based in Melbourne, Australia. Investing, markets, politics, history of economic thought. More at: https://www.gordontoy.com/

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