ATO tapped for more details on economy hit from coronavirus

The slump in Australia’s economic growth due to COVID-19 has stunned forecasters, sparking calls for fresh data.

Head of the ABS David Gruen Picture: David Caird

The slump in Australia’s economic growth due to COVID-19 has stunned forecasters, sparking calls for fresh data to better gauge the plunge in output amid a highly uncertain outlook.

The Reserve Bank estimates the economy will shrink by 10 per cent in the first half of 2020, with the unemployment rate doubling to 10 per cent. But the central bank has also admitted that the degree of uncertainty around the future has rarely been as high.

The Australian Bureau of Statistics has responded quickly to the need for more clarity on the economy by tapping the tax office for more real-time data on wages and payrolls, while also pushing banks for access to their vast stores of internal transactions data.

Head of the ABS David Gruen said he sensed in February the threat level to the economy was similar to that felt in the months before the implosion of Lehman Brothers in September 2008.

So as financial markets began to stumble on news of the widening pandemic, senior managers at ABS led by Dr Gruen were called to an emergency meeting in Canberra and told to think big.

“The last time I had that feeling was in the middle of 2008 when things were getting serious,” said Dr Gruen, a former senior economics forecaster at both the Reserve Bank and the Department of Treasury.

“It was clear then that something big was coming.”

New ABS payrolls data released on Tuesday showed that 7.5 per cent of jobs have been lost in the five weeks since virus-containment measures were ramped up in mid-March, equating to about 1 million people losing their jobs, the sharpest fall on record.

“It’s very clear now from some of the data we’ve produced, and from other observations, just how big the adverse shock has been,” Dr Gruen said.

On the other side of the pandemic, he was confident there would be ongoing demand for the new data now being rolled out by the ABS since much of its data, like the monthly labour force survey, come out with a lag.

Dr Gruen said access to the tax office’s payroll data allowed a real-time look into 99 per cent of all businesses with more than 20 employees, and 70 per cent of businesses with fewer than 20 employees.

The ABS was also eager to ­create new data sets from transactions of the banks.

“While that’s very important to them (the banks), we want to create public value out of it,” Dr Gruen said.

“So far they have been very encouraging, and it’s really a case of getting into the detail of what we are doing.

“To the extent that we are ­trying to inform measures of ­consumption or spending by businesses, it can be very valuable.”

The ABS also has access to all the transactions data from supermarket chains, allowing it to get a real-time picture of what is happening at check-outs across the country.

“What we are doing is providing public value by aggregating the data, so we can provide statistics that are more accurate, for, in this case, the consumer-price index,” Dr Gruen said.

He said the new high-frequency data sets being produced by the ABS would offer powerful insights as the economy recovers in time. “We don’t know what is to come, but on the road out we will be able to see things coming back,” he said.

Dow Jones Newswires