The Australian economy has entered into its first recession in 30 years due to COVID-19 induced global economic instability.
The June quarter GDP numbers show that the economy shrunk by 7% within that time, the Australia Bureau of Statistics (ABS) revealing this has been the biggest drop in GDP since it was first recorded in 1959.
Treasurer Josh Frydenberg confirmed this on Wednesday, commenting that: “Today’s national accounts confirm the devastating impact on the Australian economy from COVID-19.”
The shadow treasurer Jim Chalmers, upon the release of the ABS data, said in a statement that: “The numbers today will be the worst we’ve ever seen on record.”
He further commented that the recession will be “devastating” for millions of Australians, although the statistics were not a surprise.
Frydenberg revealed that the government is currently considering all options for how best to recover from this downturn, including potential tax cuts.
“That is one issue that we are considering in the context of the budget [is] recognising that if you put more money into people’s pockets there will be more spending and more spending will create jobs,” Mr Frydenberg told on the Channel Nine program Today.
The government has also hoped their JobMaker and JobTrainer plans, which involve creating roughly 340,700 new training employment will stimulate recovery.
According to the ABS data, the slump in GDP was primarily driven by the private sector, whilst household consumption fell 12.1% with less people going to restaurants, cafes, shopping and using public transport.
Meanwhile, it was reported that the average household savings to income ratio increased to almost 20% in the quarter, illustrating how more people have been saving their money during this time.
Australia’s unemployment rate has also contributed to the recession, with now more than one million people without employment at a rate of 7.5%.
In spite of the economic downtown, Frydenberg reassured that the economy will be able to recover.
“[But] there is hope. And there is a road out,” he said in a statement.
However, It is unknown at this stage when Australia’s economy is expected to recover.