The government finally realised wage subsidies were the way to go if unemployment was not going to get to 1930s levels. On analysis it looks more equitable than the UK policy and more encompassing than New Zealand.
It seems as the government realised some time this week if they did not do something along these lines it was depression here we come. Perhaps it was the very long lines outside Centrelink offices.
I don't care. I heartily approve of the policy.
Some have argued that spending 15% of GDP is way too high. This is similar to a war and debt is simply not a problem at present.
The problem will be in when to stop. For example when are visitors allowed back into Australia. Will people have any trust in our politicians when they say the worse is behind us.both here and abroad.
Will people change their behaviour and say become more thrifty as occurred post great Depression. ( My mum and dad are examples of that.) This has enormous implications for consumer spending
Will only certain industries be affected early. tourism and travel come to mind whereas hotels, clubs, gyms do not.
I now suspect we will not reach a depression i.e. a reduction of 10% or more.
I forgot to add ensuring unemployment does not reach 20% is very important from a psychological point of view. People would be absolutely deflated and be bad for mental health. Unemployment wil get to double digits but hopefully now be well away from 20%.
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