Aussies saved at record levels throughout the COVID-19 pandemic ahead of the government winding back temporary support payments.
Newly-released Treasury data shows households and businesses have amassed $200b in savings as Australians tighten their belts during the pandemic.
The government’s Jobkeeper program is set to end in March, but the government said households and businesses, buoyed by the figures, would drive Australia’s recovery from COVID-19.
Treasurer Josh Frydenberg said the Coalition’s economic parachute had ensured Australia avoided an economic catastrophe.
“The unprecedented economic support provided by the Morrison Government during the crisis means that, even as JobKeeper and other temporary emergency support measures taper off, a fiscal cliff is avoided,” he said.
“With an additional $200 billion sitting on household and business balance sheets compared to the start of last year there is a huge sum of money available to be spent across the economy helping to create jobs and maintain the momentum of our economic recovery.
“Australia has performed better on both the health and economic front than almost any other nation. The Morrison Government’s Economic Recovery Plan is working.
“With the JobMaker Hiring Credit, personal income tax cuts, investment incentives and a range of other measures our economic comeback will be continued.”
Labor has demanded the Jobkeeper scheme be extended beyond March, arguing hospitality and tourism were lagging behind other sectors.
Labor treasury spokesman Jim Chalmers warned the Coalition against “declaring victory” over economy too early with more than 2 million Australians remaining unemployed.
“JobKeeper and other types of economic support need to be tailored and responsive to what’s actually going on in the economy,” he told Sky News on Wednesday.
“The government should be considering targeted support for those workers, small businesses, industries and areas of Australia who are doing it especially tough. That’s just common sense.”
The modelling showed the impact of the emergency measures will last beyond their unwinding, as support given at the height of the pandemic took time to spend.
It found real GDP would be 5 per cent higher in 2020-21, and 4.5 per cent higher in 2021-22, than it would have been without the fiscal support.
Household deposits jumped by $113b between January and November last year, an increase of 11.4 per cent, while non-financial business deposits increased by $104b.
The household savings ratio remained high (18.9 per cent) in the September quarter, having hit record highs (22.1 per cent) in the June quarter.