Australia's coronavirus spending

Professor Junankar has criticised the Australian Government's economic stimulus package to combat the

Coronavirus-induced economic fallout and raises three main concerns about the fiscal spending. The first is the

delays: many payments are still a month off. .... Why are we waiting? This should have happened a month ago,

before lots of businesses closed down and lots of people lost their jobs."

The second problem is the decision to target businesses rather than individuals. He says the worst-affected

industries rely heavily on casual labour, especially young people and women, who will not receive some of the

aid targeting workers.

His third concern is the lack of a "grand investment" to improve the national economy. Professor Junankar cites

the Rudd government's decision to build school infrastructure and improve home insulation, which had lasting

benefits.

- ABC, April 2020

Professor Richard Holden, Professor Warwick McKibbin and Professor John Quiggin have questioned the

relevance of RBA's focus on inflation-targeting during an economic crisis.

"As part of a co-ordinated macroeconomic response, the Reserve Bank of Australia cut rates to effectively zero

and embarked upon a bond-buying program to keep three-year bond rates at 25 basis points. This is a good

start. But, as with fiscal policy, the entire monetary policy framework needs rethinking. This was clear before

COVID-19 tested the existing macroeconomic frameworks. It is even clearer now."

- ANU, May 2020

Australia is in recession for the first time in 29 years

Australia is in its first recession in 29 years, with gross domestic product in the June quarter down seven per

cent, the largest contraction on record.

The negative growth follows a 0.3 per cent drop in the March quarter, with the most recent figures taking into

account the full impact of the first wave of coronavirus shutdowns on the economy.

- SBS, September 2020

From the above concerns raised and that Australia is now officially in a recession, you have been tasked by the

House of Representatives Economics Committee to undertake the following:

1) Using data drawn from the Australian Bureau of Statistics (ABS), present diagrams showing Australia's

economic growth from September 2019 to December 2020. Describe the trend and examine some reasons

behind the cyclical movements and their impact on each of the expenditure components of GDP. You are

expected to use quarterly figures.

2) Discuss and critically analyse the effectiveness of fiscal and monetary policies employed to fight against the economic slow-down in the March quarter of 2020, June quarter of 2020 and September quarter of 2020; and how they influenced Australia's economic growth. Note: You do not need to cover all policies. Just select those that are appropriate