Why Austerity Measures Are Bad For The Economy

The Morrison government has been adamant of their desired ending of the Jobseeker, and Jobkeeper scheme ending on the Monday 14 September 2020 and ending on Sunday 27 September 2020. The Liberal Party believe themselves to be fiscally conservative, The Australian Bureau of Statistics (ABS) found the number of jobs slumped by 7.5 per cent between March 14 and April 18.

Almost 1 million Australians have lost their jobs since social-distancing measures to limit the spread of COVID-19 ramped up, new official ABS data suggests, while the Reserve Bank expects the economy to take a 10 percent hit. The Morrison government’s intended phase out of the jobseeker, and Jobkeeper scheme will not only have an economic impact on the labour force its logic is fairly wrong.

The government should be taking prudent measures to protect its civilians from the circumstantial effects of an economy shrinking due to a pandemic. Though it is not unusual for a conservative government to implement austerity measures to reduce the economic impact of a global recession it is not pragmatic to do so. Kevin Rudd’s labour government in 2008 reduced the economic impact of the global recession because it implemented Keynesian measures to safeguard against the collective contraction of the economy and its effects on the market.