THE economic update delivered yesterday by federal Treasurer Josh Frydenberg shows in detail the impact that COVID-19 has had on the Australian economy, the government spending to minimise this impact, and the additional pressure on Australia's bottom line, in terms of substantially increased government debt.
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Much of the early commentary has been, naturally enough, on the debt and deficit positions.
CORONAVIRUS ROUNDUP:
The June 30 deficit was $85.8 billion, compared with an estimate at last November's mid-year statement, before coronavirus appeared, of $2.8 billion.
The estimated deficit for 2020-21 has been revised from $2.5 billion to $184.5 billion.
As the government has said since its COVID-19 stimulus measures began, Australia's borrowing is increasing substantially.
Gross public debt on June 30 was $684.3 billion, 23 per cent up on the November estimate of $556 billion.
For June 30 next year, the gross debt estimate is $851.9 billion, a 52 per cent increase on the November estimate of $558 billion.
For a conservative government, such borrowing, largely for welfare purposes, is philosophical anathema, but record low interest rates mean repayment costs are lower, in GDP terms, than in the 1990s when we owed less, but interest rates were higher.
Yesterday's statement warns at length of the pressures facing the global economy, predicting a slow recovery no matter how quickly the virus is subdued as a threat.
Even with JobKeeper, COVID-19 lockdowns and restrictions have resulted in big job losses.
The official June jobless rate was announced earlier this month as 7.4 per cent.
Yesterday's statement says this represents an "effective unemployment rate" of "close to 11 per cent".
Applying the same 48 per cent increase to the June Newcastle jobless rate of 11 per cent, announced yesterday, would push the region's "effective" unemployment rate to 16.5 per cent.
Despite the global uncertainty, stockmarkets have recovered much of the ground lost in the month-long rout that bottomed in late March.
Financial commentators have warned of market "bubbles" and yesterday's statement says "there is a risk that global markets have not fully accounted for the economic consequences of the crisis".
A crisis forced by 15.2 million COVID-19 cases, including a record 279,700 cases on Wednesday, and almost 624,000 deaths.
ISSUE: 39,368.
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