Australia's COVID-19 spending linked to rising inflation pressures
Summary: A review of Australia's COVID-19 spending reveals that the government's $343 billion response contributed to current inflation. It found inflation was up to 2 percentage points higher due to excessive fiscal and monetary stimulus, particularly in the construction sector.
The report highlighted that while initial measures, like the JobKeeper program, helped mitigate the pandemic's economic impact, ongoing stimulus fueled inflation and skill shortages. Delays in vaccine rollout and supply chain issues worsened these problems.
The review called for a reassessment of various stimulus measures, including cash-flow boosts and housing support programs. It criticized the previous government's policies for being poorly designed and not effectively addressing supply issues during the recovery.
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