Australia’s Treasury Secretary Steven Kennedy said early steps were taken to normalize economic policy, but it was important to gradually reduce economic support to avoid adverse effects.
In an opening statement to the Senate Economic Committee, Kennedy said wise tapering of government support is important to reach the goal of full employment.
The unemployment rate in December fell to a record low of 4.2% for the first time in 13 years, and the Treasury fell further to a “quarter” or “3 ahead” figure. I expect it to decline.
“Australia hasn’t been this close to this opportunity since 2008, and before that, before the shock of the 1970s,” he told the Senator on February 16. The previous period. “
Australia’s underlying economy has proven to be stronger than the Treasury’s expectations, and Omicron’s turmoil is expected to be less than the sector’s expectations.
A financial assessment of the impact of Omicron on spending found that Omicron was relatively restrained compared to the economic impact that occurred during the Delta blockade.
“Omicron waves have a huge impact on the healthcare system and are disrupting economic activity,” Kennedy said. “but, … [it] It is expected to be relatively muted and short-lived compared to the early waves of the virus. “
The Treasury predicts that Omicron had a greater impact on working hours than employment.
The new workforce figures by the Australian Bureau of Statistics (ABS) reflect Kennedy’s comments, with unemployment stable at 4.2% and working hours down 8.8%.
January usually reduces working hours for people taking annual leave, but this time we saw a much larger decrease. ABS associates it with the number of Omicron cases and the turmoil in the labor market.
“January is in the middle of summer, and in Australia, about 90,000 to 100,000 people are usually absent from work due to illness for a week. In January 2022, about 45 employers. It was 10,000 (3.4%), “said Bjorn Jarvis, Head of Labor Statistics at ABS. Said..
Kennedy told the Treasury that the Chief Medical Officer had shown to the Treasury that another wave of Omicron could occur or another variant could emerge during the winter.
“It said the community can be confident that Australia is in a strong position to manage the wave of the future,” he said.
Meanwhile, Guy Debelle, vice president of the Reserve Bank of Australia (RBA), said it is possible, but not necessary, to raise interest rates over the next 12 months.
At the same Senate hearing, Debel reiterated previous comments by RBA Governor Philip Lowe.
“At some point [rates] It will be higher. In the end, it will depend on how things evolve, “he said.