Is the Morrison Government driving the economy off a cliff?

By Tarric Brooker | 23 June 2020, 12:00pm | 25 comments | 1,964 |

Image by Dan Jensen

The Morrison Government has begun pulling back stimulus measures, despite the coronavirus outbreak still wreaking havoc across the globe. Tarric Brooker takes a look at the economic warning signs.

AS THE Morrison Government resumes its push for a return to a "balanced budget", despite the coronavirus outbreak still wreaking havoc across the globe, we are reminded of an old episode of The Simpsons.

In the episode, the Simpson's home town of Springfield is hit by a hurricane, during which Homer unwittingly leaves the shelter to go outside during the eye of the storm, believing the worst was already over, despite repeated warnings from his daughter Lisa, until the storm comes back and he is almost blown away by the wind.

Australia now arguably finds itself in a similar position to Springfield. Our economy is in the eerie calm of the eye of the storm, as JobKeeper, government stimulus programs and mortgage deferrals cushion the blow of the crisis.

Unfortunately, these months of relative calm have seemingly had the same effect on the Morrison Government as they did on Homer Simpson. Prime Minister Scott Morrison has recently confirmed that his Government were pressing ahead on balancing the budget and returning it to surplus, despite the fact that the number of new global coronavirus cases is hitting record highs and China is showing a worrying trend toward a second wave.

Economists have been warning the Morrison Government of the threat of a “fiscal cliff” in September/October as more $12 billion-a-month in stimulus measures expire.