With a budget deficit forecast to hit 11 per cent of GDP this year, fiscal policy has become comparably as stretched as the Reserve Bank’s monetary policy. Surprisingly, the central bank this week flagged “additional monetary easing” to support job growth as COVID-19 restrictions are relaxed.

Incredibly, that easing could include a Melbourne Cup Day cut in the Reserve Bank’s cash rate target, from 0.25 per cent to as low as 0.1 per cent, even after governor Philip Lowe this week declared that the economy was recovering in most of Australia outside Victoria, and the job market had improved.