Covid-19 Stimulus: Right Size, Wrong Shape – @TheAusInstitute

Senior Economist at the Australia Institute,Matt Grudnoff, in responding to the Morrison government’s stimulus package details has said that the size of the stimulus is right for the initial response but the shape is wrong.

“The most effective form of stimulus makes up less than a quarter of the total package,” said Mr Grudnoff.

Mr Grudnoff stated that the Prime Minister asserted $3 in every $4 dollars of stimulus would go to business, “it should be other way round. Common-sense and recent history tells us that business don’t spend when their sales are falling”

“The best way to help Australian businesses right now is to get cash through the cash registers. Businesses with plenty of customers don’t lay-off staff.”

He further highlighted that the most effective part of the package is the $750 to welfare recipients. This because people living on the brink spend any extra money they receive on essentials, and this will support demand in the economy.