Katy Gallagher is the Minister for Finance, and she speaks with 7.30’s Sarah Ferguson about the government’s preparedness for a possible recession.
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Is the government prepared for a possible recession? This is a question that has been on the minds of many people as the global economy continues to face uncertainties. With the ongoing trade wars, geopolitical tensions, and the lingering effects of the COVID-19 pandemic, concerns about a potential economic downturn are rising.
The government plays a crucial role in managing the economy and has the responsibility to take necessary measures to safeguard the country’s financial stability. However, the effectiveness of its preparedness for a recession is a matter of debate.
One primary aspect of the government’s preparedness is its fiscal policy. During a recession, the government relies on its ability to spend more and cut taxes to stimulate economic growth. By injecting money into the economy through infrastructure projects and welfare programs, the government aims to boost demand and create job opportunities. However, there are concerns about whether the government has enough fiscal space to implement these measures effectively.
Countries with higher levels of debt may struggle to increase spending during a recession. Limited fiscal space can restrict the government’s ability to provide adequate support to industries and individuals facing financial distress. This can potentially exacerbate the effects of a recession and prolong the recovery period.
Another critical factor in the government’s preparedness is its monetary policy. Central banks have a significant role in managing the economy by controlling interest rates and regulating the money supply. During a recession, central banks typically lower interest rates to make borrowing cheaper, encouraging individuals and businesses to spend and invest. However, central banks need to strike a balance between supporting growth and maintaining price stability.
The challenge for the government is to deploy appropriate monetary policy measures without creating inflationary pressures. If interest rates are already at historically low levels or close to zero, central banks may have limited room to further reduce rates. In such a scenario, the government must explore other unconventional tools to support the economy, such as quantitative easing or direct lending programs.
Furthermore, the government’s preparedness for a recession involves addressing structural vulnerabilities within the economy. This includes addressing issues such as income inequality, unemployment, and productivity. A resilient and diverse economy is better equipped to handle the shocks of a recession. Investing in education, skills training, and innovation can contribute to creating a more robust economy that is less vulnerable to economic downturns.
Additionally, the government needs to ensure it has effective crisis management mechanisms in place. Swift and coordinated actions are essential during times of crisis to restore confidence and stabilize financial markets. Clear communication to the public, businesses, and international partners is crucial to manage expectations and prevent panic.
In conclusion, the government’s preparedness for a possible recession depends on various factors, including its fiscal and monetary policy flexibility, addressing structural vulnerabilities, and crisis management capabilities. However, predicting and preventing a recession entirely is challenging. The best approach for the government is to adopt prudent economic policies, diversify the economy, and maintain a strong financial sector. By doing so, it can enhance its ability to mitigate the impacts of a recession and support a robust recovery.
If people lose their jobs from a recession, not sure they need to be retrained. Also, if you make payments to those without a job, won't that increase inflation again? Possible spiral?
Talking head
CHINESE MONEY SAVE OZZIES DURING GFC 2008 BUT NOT THIS TIME.
It’s a cover,
unemployment is rising because migrant workers numbers are increasing.
Posturing journalists. Dodgy politicians.
Bring back the interim payment for unemployed people over 55 who either don't want to work or unable to work instead of putting us all on jobseeker until pension age.
I'm happy to stay on Jobseeker for the good of the economy but Centrelink keeps forcing me to look for work.
And the circus rolls on….
A woman finance minister who knows that women who lose their jobs in retail, admin, hospitality won't be eligible for their basic constitutional rights to welfare like any migrant who has served the four year rule…..but like we saw in the covid crisis, if hubby, boyfriend earns more than $75k you won't be eligible under the Partner Income Test..Time for a:-
BILL OF RIGHTS
BILL OF RIGHTS
BILL OF RIGHTS
BILL OF RIGHTS
BILL OF RIGHTS
BILL OF RIGHTS
Oh please! As if the leaders don't know that all these measures will lead to a Recession. Of course they do! All this has been done deliberately but it's always the poor that will be affected while the rich won't feel anything!
Our system is so twisted that it actively works to have a number of people unemployed.
All to benefit our capitalistic overlords
Lowe goes because of sensationalist reporting, and this is the new frontline, what the hell?
The government's strategy is to use immigration to stablise the GDP figure while masking it on a per capita basis. Something nasty is brewing, evident in bond yields across major developed economies and the falling yuan.
It's so good Labor gave us rich people a massive $69 billion in tax cuts by increasing taxes on everyone on under $120k, now we can buy so many more houses when people are forced to sell because interest rates are so high and make so much money off skyrocketing rents thanks to massive immigration.
You can bet that she won't be trying to live on welfare, The problem with our politicians is that we have scrapped through the bottom of the barrel and we are left with the dirt,
Since the government and RBA have openly admitted creating more unemployment is part of their strategy to reduce inflation, maybe it's time to pay the unemployed instead of punishing them and charge LNP members with hate speech when they demonize them, to distract from the masses of taxpayer money the LNP and their mates are stealing.
Biden regime gave us recessions. I hate democrats
Stop disabling YouTube comments on 90% of ABC videos you clowns. What is the reason?
Are you going to help? No of course the budget!
great interview. thankyou for leaving the comments on.
Somethings gotta give and we all know who's gotta pay! How about extra for those who are newly out of work who haven't been for more than a year and for 6 months to a year.
Have a surplus just means there not spending money where it's most needed
The idea that we need to have unemployed people to maintain our economy clearly illustrates the parasitic nature of our society.
Mag worldwide market narin Australia para mas mapabilis lahat. Lahat nang bansa pasukin natin for worldwide trade. Para sa mga tao. Bagsak na ang businesses sa china hayaan na pag languyin ni Russia iran saudi nang oil si china at yan ipapakqin at ipapainom sa mga chinos
lowe leaves due to kneejerk media, and this is the new frontline, good grief.