Australian recovery requires an extended support package, more social housing: OECD
Jun 11, 2020
By SBS Australia
Australia's economic output could fall by 6.3 per cent this year if there's another wave of coronavirus cases, a key global economic body warns.
But even without a second wave, the Organisation for Economic Co-operation and Development says Australia's gross domestic product will still fall by five per cent this year, with severe and long-lasting consequences.
The federal government should consider what support might be needed once the existing measures ends in September, such as strengthening the social safety net and investing in energy efficiency and social housing, the OECD said.
Education, training and improving job search programs should be focused on getting unemployment down, it added.
The report acknowledged the virus had hit Australia's economy at a time when investment was already weak and the impact of severe drought and devastating bushfires were being felt.
This led to a 0.3 per cent drop in growth in the March quarter, prompting the government to warn Australian is now in a recession given another fall is expected in the June quarter data, due later this year.
An economic recovery could be faster if consumer sentiment rapidly rebounded, the OECD said.
But a key risk to its outlook is high levels of household debt, as well as a downturn in the housing market.