Australia is predicted to see an economic bounce back in 2021 but what will happen if the V-shaped recovery decides to take the form of an L instead? jasemurphy investigates
The International Monetary Fund says the world economy will have a V-shaped recovery.
The alternative to a V-shaped recession is an L-shaped one.From next weekend, real estate agents in New South Wales will once again be able to hold traditional property inspections and on-site auctions.Larger text size Very large text size Until now, old farts like me have thought it a terrible thing that next to no one under 50 has any experience of how terrible recessions are.The number of people lining up at Centrelink offices around the country shocked government officials.
We fall down and thereafter growth is flat.Is that likely? The Commonwealth Bank thinks the economy will remain drab in 2021.Auctions were also banned and forced to move to online platforms.“We think that business investment and residential construction will be sluggish right through 2021,” wrote senior economist Belinda Allen in a note to clients on Friday.That’s good because this recession will be markedly different to any of those.“And we don’t think that the spending habits of households will fully recover to the level they were pre COVID-19.Treasurer Dominic Perrottet said the easing of restrictions was thanks to the state’s ongoing success in flattening the curve.” After they go through a grinding period of job losses and wealth destruction, people don’t go straight back to buying iPhone 10s and Ford Rangers.We are a nation built by permanent migrants – think of the Snowy Hydro scheme.
We’re going to be frugal for a while.“The real estate industry has been adaptable in transitioning to online auctions, property inspections by appointment or online, and now as we make the move back to a more normal mode of operation we must ensure safety measures such as social distancing remain a key part of the process..We’ll be milking out the battery life on that old iPhone 8, and watching the kilometres click up and up on our current car.That hurts the economy, because one person’s spending is another person’s income.Source:Supplied New data on property price movements for the month of April, released on Friday, showed a very modest increase in Sydney after several months of strong growth.Businesses will be the same – many are taking on debt to make it through this period, and once the recovery starts, their focus will be on paying down that debt instead of spending money to grow their business and hire more people.They jam on the interest-rate brakes but hit them too hard for too long, and the economy ends up careering off the road and hitting a tree, with many people losing their jobs.The Commonwealth Bank’s forecast of our economy has the level of GDP getting back to where it was in late 2022, as the next graph shows.Health Minister Brad Hazzard said the measures were crucial in protecting people and slowing the rate of spread of COVID-19 in NSW.As at June 2019 there were 2.
GDP back to pre-COVID-19 level by late 2022 Source:Supplied Note that this is a different graph to the first graph.This shows the level of GDP, the IMF graph earlier showed the growth rate.“Real estate agents should limit the number of people viewing a property and attending an auction, follow stringent cleaning and safety guidelines, ensure clients do not touch surfaces and always have hand sanitiser available.Advertisement Until now.There’s a funny thing about growth rates.If you shrink by 6 per cent then grow by 6 per cent, you end up smaller than you started.Source:Supplied And Mr Perrottet said the sector shouldn’t become complacent just because the rules are being eased.Imagine we start at an arbitrary level 100; we fall by 6 to 94.As we’re about to discover, it’s a huge price to pay.Migrant workers don't just pick fruit: one in five chefs, one in four cooks, one in six hospitality workers, and one in 10 nursing support and personal care workers in Australia hold a temporary visa.
But 6 per cent of 94 is only 5.“If people are not genuinely in the market for a new home, now is not the time to be having a look through their neighbour’s house.64.If we grow by 6 per cent we’re not back where we started.5m is maintained at all time and that good hygiene on premises and at auctions is promoted.And let me tell you, being unemployed for months on end also has adverse social consequences: feelings of anxiety, inferiority and worthlessness, depression, suicidal thoughts, money worries that lead to marital conflict, breakups and violence.If growth falls to negative 6 per cent this year, we need to grow by more than that next year to get back to where we began.GLOBAL GROWTH The Australian economy depends, these days, on the rest of the world.Outdoor venues for auctions should be used.Loading Who we bring in matters too.
Even if we eradicate the virus and our domestic economy starts to fire up, our exporters – farmers, miners, education and tourism - need the rest of the world to provide their incomes.Usually, economies slow for months before they stop; this time, most industries stopped on pretty much the same day.And as the Grattan Institute observes, the rest of the world is suffering.And anyone who is feeling unwell should stay away.“A striking feature of COVID-19 is that it is hitting all major economies almost simultaneously,” wrote author Brendan Coates and colleagues in a recent analysis.“The prospects for a rapid ‘V-shaped’ economic recovery are remote.Reserve Bank governor Dr Philip Lowe said last week the recession would be a “once in a lifetime event”.The duration of the COVID-19 crisis is uncertain, but the direct economic effects on employment are likely to persist for some time.As a result of COVID-19, Australia will soon have an opportunity to do something we have never done before: restart a migration program.
jasemurphy Jason. I don’t think we’ll get a V curve - note an increase in Bus Inv will take years as many SMEs are currently using $ surpluses or borrowing to fund the Job Seeker Payments - they won’t get this back for a few months so any pllanned inv (if any) will be pushed back. jasemurphy Great piece today Jason!
Virus restrictions on the real estate sector in NSW to be easedNew South Wales will wind back another significant coronavirus ban next week, and it’s one that has a significant economic impact. inspections routineinspections auctions to quick too soon people always lots of people, conjestions too quick too soon, coronavirus is still around so how winter is coming in Australia SocialDistancing health should be prority all it will be all hard work for nothing That’s a relief. Agents can stop giving financial advice now It's one that could have a significant health impact on the tenants that will be forced to have many people come into their homes this weekend
After the anti-social lockdown comes the anti-jobs recessionOpinion: This recession will be so big and bad that not even the official always-look-on-the-bright-side brigade is trying to gild the lily | 1RossGittins 1RossGittins This recession was always coming, now watch as lying politicians and media blame DiversityFlu when that was just the catalyst. The debt based ponzi scheme, shipping manufacturing off-shore, the housing and immigration bubble are all the true cause. Don't be fooled. 1RossGittins No. It's a small price to pay. Aust is very close to beating the virus, where it's under control with no new infections. Immigration stopped & business can employ Australians, retrain, reskill etc... Number of jobless ought to go down to below prior levels if no migrant influx. 1RossGittins Our economy was already a ponzi scheme house of cards and the corona virus diversity flu just knocked it over that's why.
Do we want migrants to return in the same numbers? The answer is noPerspective: Our economic recovery must help all Australians get back on their feet, and to do that we need a migration program that puts Australian workers first, writes Labor senator Kristina Keneally can we trade KK for a refugee on Manus Keep them out. Brilliant suggestion,,,,,100% agree with KK.
Coronavirus Australia: Taking small steps to leave the COVID-19 lockdownNSW residents have begun making the first moves back from the coronavirus lockdown in a bid to deal with mental health now and the economic reality to come | mevanssmh sarah_keoghan
Lockdown trend we didn’t predictLockdowns around the world have been successful in suppressing virus transmission. So successful in fact, they have created another problem entirely. coronavirus COVID19 It is called INSTITUTIONALISATION 😍 MissionCompleted dictatorship WHO CommunismNotCorona WorldHealthDay Covid_19 PrisonBreak
'This is the storm': Inside the call centre dealing with Australia's abusive men - ABC NewsWith coronavirus lockdowns shaping patterns of domestic abuse behind closed doors, the Men's Referral Service has seen an increase in calls from men seeking help with their own violent behaviour. From what I have personally witnessed and had to deal with repeatedly... even though I do not believe there exists any formal study on this... there should be... I believe strongly that a lot of the violence from men is spawned by the games of football. Gee, perhaps they hang up quickly because they soon realise that they are being screened as perpetrators in denial. And then even if taken seriously there is no-one to refer them to anyway Feminism means GenderBias not GenderEquality