Terry McCrann: Victoria the key to country’s financial journey
Victoria has now the pivot for what happens with the virus, meaning the key to what happens with the national economy and all states and federal budgets depends on our state, writes Terry McCrann.
Terry McCrann
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Victoria is now the pivot for everything.
It’s obviously the pivot for what happens with the virus. That makes it the key to what happens with the national economy and to what happens with the budget — budgets, plural, all states and federal – the deficits, the debt, interest rates, jobs, everything.
Indeed, everything in the budget numbers are built on the fundamental assumption that Victoria’s Lockdown 2.0 lasts only the currently scheduled six weeks.
It also assumes the international travel bans will end by January — albeit with a continuing 14-day quarantine requirement which would rather crimp both tourist and business travel out of and into Australia.
Make your own judgments on those. I find it hard to believe Victoria is going to emerge miraculously from Lockdown 2.0 that quickly.
Indeed, we still have to find out whether other states and NSW in particular end up joining Victoria. This suggests that the deficits will be bigger than the total $270bn forecast over the two fiscal years and the economy will be weaker.
The jobless numbers — supposedly peaking at 9.25 per cent — are outright laughable and built on the fakest of fake numbers.
The ABS has told us the jobless rate is only 7.4 per cent; the real rate is closer to 18 per cent.
All this said, the deficits are the deficits we had to have; the government had to hand over well over $100bn to the real jobless and the would-have been jobless.
The spending, and so the deficits, have stopped the economic carnage from being so much worse.
The deficits and the big surge in debt to (officially) $850bn — it will go well past $1 trillion — can be managed with interest rates so low, as captured by no threat (for the moment) to our Triple-A rating.
But we are embarked on a long road back — even if the world gets on top of the virus.