As countries around the world are fighting the new coronavirus and its impact on the economy, governments of all countries have provided unprecedented sustained support to families and businesses.
For countries like the United Kingdom that have been most affected by the pandemic, the economy has been hit harder. The British government has also introduced many economic support policies.
Based on this fact, people's normal guesses should be that the level of support provided by the Australian government to the Australian economy will be much lower than the level of support provided by the British government to the British public, but this is not the case.
Although the number of coronavirus cases per capita in the UK is 46 times higher than that in Australia, the economic stimulus measures that the Australian government spends as a percentage of GDP are actually 86% higher than the British government!
With the exception of the United Kingdom, Canada, France, Italy, New Zealand and many other countries/regions are far more severely affected by the epidemic than Australia, but their economic stimulus measures spend less on GDP than Australia.
As we all know, when the epidemic was at its worst, New Zealand also had an excellent ability to respond to the epidemic, and it was not much better than Australia.However, relative to GDP, the economic stimulus plan launched by the New Zealand government is 35% smaller than Australia!
Although other countries have experienced more obvious and worse results due to the epidemic, compared with other countries in the world, the scale of the Australian government's stimulus plan is undoubtedly excellent.
Stimulus measures save Australia's economy from water and fire
The influx of so much extra cash into the economic market has prompted a huge boom in some industries.Although certain parts of the retail economy have suffered severe losses during the epidemic, such as the closure of stores one after another.But overall, after comparing the latest retail sales data with the data from 12 months ago, in November 2019, spending still increased by more than 11%.
At the same time, in the used car market, as Australia uses their Super to buy cars instead of public transportation, the price of used cars has soared and the total inventory level has plummeted.
With hindsight and the ability to contrast with the financial support measures of other countries, we can now see that given the good management of this pandemic, the government's stimulus measures may be disproportionate.
But the most critical point of the current economic stimulus measures has passed. The impact of the epidemic on the economy has begun to fade, and the Australian economy will soon need to start "self-reliant" again.To use Morrison's speech: "You can't run the Australian economy on taxpayer money forever."
But in the short term, the large amount of cash that Australians have stored during the epidemic may bring some temporary relief to the economy.
In fact, between March and October 2020 alone, Australian households have accumulated A$3 billion in savings.
As a country, Australia is undoubtedly excellent, helping citizens get rid of their difficulties quickly and effectively.
However, even for the best brokerage managers, canceling economic stimulus measures will be a difficult task, and it is usually easy to cause some form of large-scale economic contraction, especially the JobKeeper and JobSeeker plans will be stopped at the end of March. This major economic contraction seems imminent, and how to deal with it will become a new challenge.
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