The Morrison Government welcomes the International Monetary Fund’s (IMF) latest assessment of the Australian economy, which highlights that Australia’s “strong health and economic policies allowed for a quick economic recovery” which was “faster than in most other advanced economies”.
Australia entered the COVID-19 pandemic from a position of economic and fiscal strength supported by “sound macroeconomic management, including prudent fiscal policy”. This allowed unprecedented economic support to households and businesses providing crucial lifelines to support the economy.
With our vaccination rates now among the highest in the world, the IMF expects Australia to continue its strong economic rebound on the back of the Government’s “instrumental” economic and health response, noting that prior to the Delta outbreak, economic activity was “well above pre-pandemic levels”. With restrictions easing, household consumption is expected to strengthen while “large scale tax incentives” are expected to stimulate the strongest lift in business investment since the mining boom with the economy expected to grow by 4.1 per cent next year.
Importantly the IMF anticipate a “quick recovery” in the labour market and with 350,000 jobs coming back since the start of September, the IMF is forecasting the unemployment rate to be sustained at 4.7 per cent in the years ahead.
With advanced economies witnessing a “decline in labour productivity after the Global Financial Crisis”, the IMF recommends that structural policies continue to focus on improving productivity performance. That is why the Morrison Government continues to implement reforms to the tax system to reward aspiration, to train and reskill the workforce and increase infrastructure investments to drive productivity.
Recent reforms to enhance the R&D tax incentive along with the introduction of a patent box will further encourage domestic commercialisation of innovation. The Morrison Government will also continue to invest in the energy transition through the Technology Investment Roadmap to accelerate the uptake of low emissions technologies and a Digital Economy Strategy to harness the opportunities that arise from the pandemic. A modern digital economy will help create more jobs, make Australia more competitive and improve productivity.
The Australian economy has continued to demonstrate its remarkable resilience in the face of the pandemic. The Morrison Government is focused on growing the economy and creating more jobs to secure Australia’s world leading recovery.