Treasurer Josh Frydenberg says coronavirus wreaks havoc on economy, Labor says jobs plan needed
Treasurer Josh Frydenberg says falls in spending on transport, hotels, cafes and restaurants caused by coronavirus has “wreaked havoc” on the economy, and deputy Labor Leader Richard Marles says the government has no plan to fix the jobs crisis to start the climb out of the hole.
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Treasurer Josh Frydenberg says falls in spending on transport, hotels, cafes and restaurants caused by coronavirus have “wreaked havoc” on the economy.
The Australian economy has officially entered a recession with the latest national accounts figures confirming the worst contraction since World War II.
Australia’s gross domestic product fell 7 per cent in the June quarter, revealing the financial wounds inflicted upon the economy from the initial lockdown sparked by the coronavirus pandemic.
It is the largest quarterly drop on record and higher than what was anticipated by the Reserve Bank.
Mr Frydenberg said household consumption fell in 10 of the 17 consumption categories.
He said social distancing and travel bans saw large falls in spending on transport services, hotels, cafes and restaurants. “(There were) small increases in an alcoholic beverages, furnishings and household equipment, recognising that people are staying at home,” he said.
Deputy Labor Leader Richard Marles said there were more than one million people unemployed but the federal government didn’t have a plan to fix the jobs crisis.
“Australia is in the deepest recession since World War II. There is no plan for the economy, which means the recovery will take longer and more jobs will be lost,” the Corio MP said. “Worryingly, there is no plan from Scott Morrison for jobs, not in Geelong, not across Australia.”
Treasury is understood to be waiting for Victorian Premier Daniel Andrews to reveal his road map out of lockdown before announcing an economic recovery plan.
This week legislation to split JobKeeper into two tiers and extend it for an additional six months passed parliament.
Mr Frydenberg said welfare benefits rose by 42 per cent in the June quarter, contributing 4.4 percentage points to growth in household disposable income.
Household savings ratio also increased to a record high of 19.8 per cent in the quarter.
“The health-related restrictions significantly affected our tourism and our international education industries,” he said.
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“With services trade heavily impacted by travel bans on inbound and outbound travel, travel-related trade has almost ceased, resulting in sharp falls in both imports and exports.”
Mr Frydenberg said the grim figures released on Wednesday were “extremely sobering and indeed devastating”.
“COVID-19 has wreaked havoc on our economy and our lives like nothing we have ever experienced before. But there is hope. We have done everything possible to cushion the blow for the Australian community from COVID-19.”
Originally published as Treasurer Josh Frydenberg says coronavirus wreaks havoc on economy, Labor says jobs plan needed