Catch up on COVID-19 with CCIQ Chief Economist Dr Marcus Smith – Qld budget impact

I caught up with CCIQ Chief Economist Dr Marcus Smith earlier today to chat about the latest economic news and the expected impact of the coronavirus shock on the Queensland state budget. You can listen our conversation here:

Highlights of the discussion include:

  • 1:00 – discussion of the March ABS Labour Force estimates which don’t reflect the full coronavirus-shock yet
  • 4:00 – a problem with the implementation of the JobKeeper payment
  • 9:30 – discussion of how we’re heading for double-digit unemployment rate (10-12% or more) and how economy probably won’t quickly recover once restrictions are lifted, and why JobKeeper may not save as many jobs as hoped, as business owners will foresee weak conditions persisting even after restrictions are lifted
  • 13:00 – beginning of discussion of large impact of coronavirus shock on Queensland Budget
  • 17:30 – “fair to say” Queensland Government is on trajectory to $100 billion of total debt
  • 20:30 – discussion of whether it’s possible the Commonwealth will have to help out the states with their borrowing task, e.g. via a guarantee, as occurred during the 2008-09 financial crisis (see my book Beautiful One Day, Broke the Next which tells the full story)
  • 22:00 – reference to encouraging news from QTC that it was well ahead on its borrowing task prior to coronavirus shock (see the QTC Quarterly Update)
  • 27:10 – Marcus mentions the latest CCIQ Pulse Survey is closing soon, and we discuss how it’s likely to show a huge drop in business conditions and confidence, as the NAB survey has shown (see chart below)

NAB_business_conditions

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