What a week: boosting confidence now key to economic recovery

There has been a lot going on over the past week. To kick off, the June quarter National Accounts confirmed what we already knew…recession. While this outcome was well anticipated, as an economist I find it hard not to tarry on that result for a moment.

The quarterly drop in GDP at seven per cent was more than three times as large as the previous largest quarterly fall recorded in the mid-1970s and delivered the biggest annual contraction since the 1930s. Underpinning this collapse was a massive drop in household consumption and a corresponding increase in the household saving rate to 19.8 per cent – again a number not seen since the 1970s. Yesterday’s news yes, but these numbers matter for the future. 

Economic recovery will depend on our ability to get consumers spending again and that requires confidence. To paraphrase Keynes (badly perhaps) ‘you can’t get fat simply by buying a bigger belt’. A recent study of how Americans spent their coronavirus stimulus reported in The Economist confirms this. It showed that less than 50 per cent of stimulus money was actually spent, with 27 per cent saved and 31 per cent used to repay debts. In the lead up to the Federal Budget (more about this below) it is critical we focus our attention on how to boost confidence and target measures to get the best bang for buck from additional stimulus. 

Speaking of confidence, while welcoming information provided by the Victorian Premier yesterday, more clarity is needed around Victoria’s reopening. Supressing the second wave of COVID-19 is crucial to building community confidence, but so too is further detail about the next steps and a stronger sense that business perspectives and insights are being considered. This is a matter of importance to those of us in Victoria, but also to the nation in terms of broader confidence and economic impacts. 

With the Federal Budget looming next month, CEDA has been looking at national policies that can help recovery. This week, CEDA is releasing a series of papers from its Council on Economic Policy (CCEP) on how to boost employment as we emerge from the pandemic.

Migration and childcare policy

Making childcare more affordable and accessible for families is also the focus of a new report from KPMG and The Front Project out today. Access to affordable and quality early childhood education enables parents, particularly women, to return to work and secure their financial situation. This is important to improving family wellbeing, while also contributing to the economy. It seems clear that we cannot afford to ignore barriers to workforce participation as we look to restart our economy. You can hear more on this topic in the podcast CEDA Chief Economist, Jarrod Ball, recorded last week with The Front Project Chief Executive, Jane Hunt.

Tourism

Last week Jarrod also presented his views on the economic impacts of the pandemic on the tourism sector to Queensland operators. Tourism was arguably one of the sectors most eagerly awaiting last week’s National Cabinet decision on state borders, given around a quarter of tourism’s $60 billion direct contribution to the economy comes from interstate travel. Jarrod’s presentation, which is available here, also addresses the broader economic outlook. You can read Jarrod’s blog piece on the economic impact on tourism out today here.

Emerging leader training

We’re pleased to be opening up places in the NSW Copland Leadership Program, which starts on Tuesday 6 October. Following from WA’s successful launch of face-to-face delivery of the program in recent weeks, we’re excited to have face-to-face training back in Sydney. The Copland Leadership Program is CEDA’s professional development program for emerging leaders ready to take the next step in their careers. Now more than ever, as we work our way out of the pandemic, strong leadership skills are critical.

The three-day program takes place over six weeks and is limited to 24 participants to ensure an exclusive and personalised learning experience, with presentations from industry leaders and mentoring opportunities. CEDA encourages you to nominate yourself or an emerging leader in your team for the Copland Leadership Program as part of their professional development for 2020. To find out more, please contact Julia Tolj.

Watch: 

We again have some great livestream events coming up this week with a focus on border management and the green recovery.

On Thursday, Australian Border Force Commissioner, Michael Outram APM, will speak on Supporting our recovery through strong border management. Register here.

On Friday, Climate in recovery: building back better will focus on how business and governments are harnessing the COVID disruption to accelerate the decline of carbon-intensive practices, featuring: Victorian Minister for Energy, Environment and Climate Change, the Hon. Lily D’Ambrosio; NSW Minister for Energy and Environment, the Hon. Matt Kean; Acting British High Commissioner to Australia, Ingrid Southworth; and Government of the UK, High Level Climate Action Champion, Nigel Topping. Register here.

Next week, The future of Australia's higher education sector will examine the important economic and social contributions of higher education. Federal Minister for Education, the Hon. Dan Tehan, will be speaking at this event, along with University of Technology Sydney, Vice-Chancellor and President, Professor Attila Brings; Group of Eight Australia, Interim Chair and Monash University, President and Vice-Chancellor, Prof. Margaret Gardner AC; and Universities Australia CEO, Catriona Jackson. Register here.

WA Premier confirmed for December, Tasmanian Premier speaking this month

We have also just confirmed West Australian Premier, the Hon. Mark McGowan will deliver the 2020 WA State of the State address on Wednesday 2 December. The Tasmanian State of the State livestream with Tasmanian Premier the Hon. Peter Gutwein will be held on Wednesday 30 September. You can also watch highlights of our recent State of the State event in Queensland with Queensland Premier, the Hon. Anastacia Palaszczuk, and the COVID-19 Recovery Plan address by NSW Premier Gladys Berejiklian.

Listen: 

As mentioned above, in the latest episode of The economists’ corner, CEDA Chief Economist, Jarrod Ball discusses the profound impact COVID has had on early childhood education, how families are coping with the crisis, and what Australia can do to make sure all young children can access the education they need with The Front Project Chief Executive, Jane Hunt. Listen here.

And in a new episode of The Greater Good, I catch up with Doherty Institute infectious diseases physician and medical epidemiologist, Dr Katherine Gibney to talk about how Australia has handled the COVID-19 pandemic so far, what we should now be doing and what the next six months could look like. Listen here.

Read:

Australian businesses need to invest in innovation to compete globally, but we need to have the right frameworks in place to ensure this investment leads to real growth. This week on the blog, Swinburne University of Technology Vice Chancellor (Research and Enterprise), Professor Bronwyn Fox, Pro Vice Chancellor (Research and Impact), Professor Beth Webster, and Senior Advisor, Leanne Barnes, survey the research on Industry 4.0 to show how business, government and researchers can work together to create new growth opportunities. Read more here.

And as discussed above, CEDA Chief Economist, Jarrod Ball, has written a piece on the unique challenges facing the tourism sector. He says that while most operators in the sector face a difficult outlook, there are opportunities on the other side of the crisis for businesses that persevere. Read more here.

Leadership team profiles

Following last week’s profile of CEDA Director, Membership, Mel Nelson, this week the focus is our Director, Partnerships and Collaboration, Hamilton Calder. You can read Hamilton’s profile here.

Members

A special call out to our two new state members – it is great to welcome you to the CEDA community – and also thank you to our renewing members this week.

New state members

Lifeline Australia (NSW)

Water Services Association of Australia (NSW)

Renewing national members

AEMO

Australia Post

CSIRO

Renewing state members

Brisbane City Council (QLD)

Carnegie Mellon University-Australia (SA)

CoINVEST (VIC)

Community Services Industry Alliance (QLD)

ConocoPhillips Australia Operations (QLD)

HASSELL (WA)

Senate SHJ (NSW)

Victorian Department of Education and Training (VIC)

As always, stay safe.

Melinda.