The economy may have posted the weakest set of employment figures on record – with the worst yet to come – but financial markets still see Australia as a “good bet,” Scott Morrison says.
The prime minister’s comment came after Friday’s national cabinet meeting, which was briefed by the Treasury secretary Steven Kennedy, Reserve Bank governor Philip Lowe and the Australian Prudential Regulation Authority (APRA) chair Wayne Byres.
“It was an opportunity, an important one, to be briefed fully on yesterday’s unemployment figures and how it was impacting across the country,” Mr Morrison told reporters in Canberra on Friday.
The meeting was told stability has returned to financial markets and that they remain “very functional”, while the banking system has stood up well.
“It’s essential that as we move forward, that we continue to enable the credit to flow through our banking system, to support those businesses who are taking decisions to reopen, to rehire, and to move ahead,” Mr Morrison said.
He said there has been some $220 billion in loan deferrals granted by the banks while the superannuation system is responding well to the ability of people to make an early withdrawal from their accounts during the crisis with some $11.7 billion in claims so far.
The government has also had to raise debt to $90.1 billion through government bonds and Treasury notes since March 20 – $19 billion in the past week which was again oversubscribed.
“Markets are seeing that Australia is a country that can be relied upon, and that is a good bet in what is a very uncertain time,” Mr Morrison said.
“Our ability to raise this finance in such a difficult time is essential to ensure that we can continue to provide those necessary economic supports.”
The government has spent some $320 billion in an attempt to shield the economy through the pandemic.
The $130 billion JobKeeper scheme has already benefited some 6.1 million Australians, while the revamped JobSeeker program – formerly known as Newstart – is supporting a further 1.6 million people.
The government is due to review these programs at the end of June, which has led to speculation they may not last the legislated six months.
But Mr Morrison pointed out the programs have only been running seven weeks.
“It is very premature, I think, to be making judgements about what possible changes might be made.”
The economic damage caused by coronavirus finally hit home when Thursday’s monthly jobs figures showed nearly 600,000 people were laid off in April.
It was by far the biggest number lost in one month on record, the previous being a relatively modest 75,000.
The unemployment rate also recorded its biggest one-month jump on record, spiking to 6.2 per cent from 5.2 per cent in March.
Mr Morrison said Treasury is sticking with its forecast for the jobless rate to hit 10 per cent in the June quarter, which will be the highest since the aftermath of the early 1990s recession.