Australians have amassed a $200 billion war chest in personal savings to protect their families and businesses from the COVID-19 recession.
New Treasury figures have revealed for the first time the extraordinary cash reserves workers and bosses have amassed to save for a rainy day.
And the balance sheets are one reason why the Morrison Government claims it’s safe to start withdrawing the “life support” measures including JobKeeper and increased JobSeeker payments.
In fact, the Treasurer claims the large increase in savings has been underpinned by the Morrison Government’s unprecedented $251 billion in economic support.
“The unprecedented economic support provided by the Morrison Government during the crisis means that even as JobKeeper and other temporary emergency support measures taper off a fiscal cliff is avoided,’’ Josh Frydenberg said.
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“With an additional $200 billion 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.”
Previously, figures have revealed Australians are paying down their credit cards faster than previous years and now they’re stashing the cash in mortgage offset accounts and savings accounts.
Household deposits have increased by almost $113 billion in the year to the end of November.
Treasury modelling also claims the Government’s fiscal support will lead to the real GDP (gross domestic product) being 5 per cent higher in 2020-21 and 4½ per cent higher in 2021-22, as opposed to what it would have been without fiscal support.
But as the Morrison Government spruiks the good news, Labor has warned the impact of withdrawing support through the JobKeeper scheme is diabolical as thousands of businesses were recently hit by snap lockdowns in Brisbane and in Sydney’s northern beaches.
Labor’s industrial relations spokesman Tony Burke claims workers could also lose between $840 and $1170 from their pay packets next summer holidays if Scott Morrison cuts public holiday penalty rates.
“The Government says the economy is doing well enough that businesses no longer need JobKeeper. 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,’’ he said.
A new analysis of 10 of Australia’s most common workplace awards — using the government’s own fair pay calculator — shows just how much Australians could lose over the summer period if penalty rates are cut for Christmas Day, Boxing Day, New Year’s Day and Australia Day.