Australians have stockpiled more than $200bn in savings as a cushion against the financial uncertainty brought about by COVID-19 pandemic, according to new Treasury figures.
A new Treasury analysis obtained by Business Insider revealed that Australian households have amassed more than $112bn, while businesses, excluding financial institutions, have stashed away another $104bn in deposits in preparation for a pandemic-fuelled recession.
The revelation comes as the debate over the lifting of government support schemes such as JobKeeper and JobSeeker continues.
According to the federal government, the balance sheet is an indication that it is the right time to start withdrawing these stimulus measures.
“With an additional $200bn sitting on household and business balance sheets compared to the start of last year, there is a huge sum of money available to be spent across the economy helping to create jobs and maintain the momentum of our economic recovery,” Treasurer Josh Frydenberg told BI.
The Treasury’s modelling also showed that the government’s fiscal support will boost gross domestic product by 5% in 2020-21, and a further 4.5% in 2021-22, compared to the negative and flat growth rates that would have been recorded without any support measures.
However, Labor has expressed concerns about the impact of cutting JobKeeper payments, especially with the recent lockdowns in Brisbane and Sydney’s northern beaches affecting thousands of businesses.
Tony Burke, shadow minister for industrial relations, told News.com.au that the government’s plan to reduce public holiday rates would also cost workers between $840 and $1,170 in wages by next summer.
“The government says the economy is doing well enough that businesses no longer need JobKeeper,” Burke said. “But then they say the economy is doing so badly they need to cut the pay of workers. They can’t have it both ways.’’