Queensland set to dig its way out of “recession”
THE fallout from the coronavirus crisis is expected to plunge the Australian economy into a "deep recession" but the blow could be softer in resource-rich Queensland.
According to the latest Deloitte Access Economics' Investment Monitor, although the tourism industry has been hard hit, Queensland's resource sector would likely help limit the overall economic impact to the state.
"The Queensland government has provided an above average amount of stimulus, it has relatively few cases of COVID-19, and it can continue selling its LNG and other resources to the world," the report states.
"That doesn't stop a recession but it does limit its size."
However, the report warns the latest data does not yet reflect the "full impact" on the tourism industry and that investment "looks set to be relatively weak with businesses being cautious amid current uncertainties".
It also states that with the total amount of private business investment set to fall by more than one third in 2020, it is "imperative that businesses are encouraged to be courageous".
Deloitte Access Economics partner and report lead author, Stephen Smith, said that while stimulus measures announced to date include some changes that will directly support business investment, more will be needed.
He said with consumer confidence falling to its lowest point in three decades and the largest decline in business confidence on record it is likely that governments will have to "do the heavy lifting" and lead by example in the near term.
"There is already a large pipeline of publicly funded infrastructure work underway and in planning across Australia," Mr Smith said. "The continuity of the existing pipeline is essential to Australia's recovery from the 2020 recession."
He said it was also crucial that future spending is well-directed.
"There will be a temptation for governments to pursue large nation-building projects as a way of stimulating the economy, but the focus should instead be on improvements to existing infrastructure and smaller developments. These types of investment tend to generate the largest relative economic returns."