It's definitely great news for the budget though.
It's good and bad in a way. The government seems to now be swinging back to its usual deficit hawking which is not going to help with this situation. Id rate myself as being fairly economically conservative, but I think this cult of surplus at all costs isn't helpful and is kind of ridiculous especially now. Either way, there will be a deficit, either due to falling revenues from a lack of economic activity or due to stimulus. The government needs to get the economy going otherwise we are going to have serious structural economic issues and no amount of penny pinching will get us back in the black. Plus interest rates are as low as it gets and unlikely to rise again for the foreseeable future, so the time is right for borrowing
The government should be looking at how the extra $60 billion from JobKeeper can be spent elsewhere. A good start I think would be a small works fund, which targets small infrastructure upgrades/developments (i.e. street re-tarring, bus stop upgrades etc). The NSW Government recently announced a $9 million regional court uplift program which I think is a great start, because the money will quickly create jobs and put money back into the economy. I think it would be wise to avoid mega-projects which have a significant lead time before money is spent. It would also be a good time to start looking at some much needed structural reforms to the tax system whilst the window is open and there is an impetus for change. Industrial relation reforms, whilst needed are a bit of a distraction and not a good starting point, considering there are other reforms which are less divisive.
The fact is, this whole COVID-19 can be an opportunity for renewal, because the economy was really slowing down before this hit. Whilst I dont mind this government, there didnt seem to be much impetus for reform prior to this, which I think would have led to a long economic malaise without intervention. Maybe we can turn a negative into a positive?
