New solution needed for economic stop-start

By Lachlan Maddock
 — 1 minute read

With support measures set to unwind before the vaccine is rolled out – and the possibility of restrictions remaining in place for longer – it’s clear the government needs to explore new options.

While a catastrophic “fiscal cliff” has so far failed to materialise as restrictions ease and businesses reopen their doors, the imminent unwinding of JobKeeper looms as an inflection point for a recovery that could well be kneecapped by stop-start border and health restrictions. 

“There will be some tough times ahead, but what we do know is that JobKeeper complements and sits alongside a whole lot of other support measures that the government has put in place where money will continue to flow over the coming months and that will continue to support the Australian community in this time of need,” Treasurer Josh Frydenberg told media.


While it’s prudent to look to the recovery and not linger on getting businesses that were barely solvent pre-pandemic over the line, the government’s strategy ignores the fact that COVID-19 will be sticking around. Chief medical officer Paul Kelly has warned that health and border restrictions will be with us until at least the second half of this year, while potential new mutant strains of the virus – not to mention rampant disinformation – could also pose a challenge to efforts to inoculate Australia’s population. 

New border restrictions triggered as a result of the most recent outbreak have hit the already battered tourism industry hard, and while the Morrison government insists that the solution is simply to not close the borders, the states and territories will not be so easily persuaded that risking even a “Victoria-lite” situation is their best option. 

A stopgap measure, such as an emergency form of JobKeeper available to those that face financial strife as a result of flash lockdowns and new border restrictions could be one way of keeping businesses above water. Permanently increasing JobSeeker, as many prominent economists have suggested, would also help to alleviate some of the damage. 

While the government shouldn’t spend billions on businesses that were already failing, there are plenty of well-run and successful businesses that will be lost as a result of ongoing restrictions. With more strife yet to come, and the recovery just barely underway, the government should think twice about withdrawing support.

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New solution needed for economic stop-start
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