Economic snapback? Fiscal stimulus hasn't even started yet

By Adam Triggs
May 18 2020 - 6:30pm
The Australian economy isn't just going to snap back, as the government is predicting. Picture: Shutterstock

The government's spending since the COVID-19 crisis began doesn't qualify as fiscal stimulus. Its goal has been to ensure households have enough money to survive the government-mandated lockdown rather than to encourage shopping, eating out and holidays. The sheer scale of the pandemic's economic damage will only be clear once the economy starts to reopen and the fog of the lockdown lifts. That's when fiscal stimulus needs to start. With little choice but to continue spending, the government will regret its talk of a short-term snapback and a quick end to big government.