tag:theconversation.com,2011:/us/topics/aofm-86936/articlesAOFM – The Conversation2020-12-16T19:03:54Ztag:theconversation.com,2011:article/1520822020-12-16T19:03:54Z2020-12-16T19:03:54ZNegative rates explained: how money for (less than) nothing is helping out the budget<figure><img src="https://images.theconversation.com/files/375542/original/file-20201216-15-16roe9r.jpg?ixlib=rb-1.1.0&rect=758%2C186%2C2355%2C1211&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">hingfoto/Shutterstock</span></span></figcaption></figure><p>A week ahead of Thursday’s budget update, it finally happened.</p>
<p>Instead of the government paying to borrow in a way that would add to the burden on the budget (as has happened since time immemorial) it actually got <em>paid</em> to borrow.</p>
<p>Think about that. Investors with millions of dollars to lend went to the Australian treasury and said not only we won’t charge you interest, but furthermore we will pay you <a href="https://www.aofm.gov.au/">0.01%</a> to make sure that you take it.</p>
<p>Not all of the borrowing the government did on that day was for negative interest rates; the rest was for slightly positive rates, but the <a href="https://www.smh.com.au/politics/federal/government-interest-rate-goes-negative-in-550m-treasury-note-sale-20201210-p56maq.html">dam has been broken</a>.</p>
<p>The loan is short-term, being repaid in March 2021, and the payment to the government is still small relative to the scope of the budget. But future, bigger bond auctions might yield bigger payments at even lower (ie more negative) interest rates.</p>
<h2>Who’d lend for less than nothing?</h2>
<p>Australia is late to the party. Interest rates on government borrowings are below zero in Japan and much of Europe. Bloomberg news now says that a jaw-dropping <a href="https://www.bloomberg.com/news/articles/2020-12-11/world-s-negative-yield-debt-pile-at-18-trillion-for-first-time">US$18 trillio</a>n of global debt is trading at negative rates.</p>
<p>Germany for example can borrow at minus <a href="https://www.bloomberg.com/markets/rates-bonds/government-bonds/germany">0.8%</a>. And while Treasury’s borrowing last week was only for three months, investors are willing to lend to Germany at negative interest rates for 30 years!</p>
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Read more:
<a href="https://theconversation.com/weve-just-sold-15-billion-31-year-bonds-whats-a-bond-143598">We've just sold $15 billion 31-year bonds. What's a bond?</a>
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<p>Who’d lend money for less than nothing? Many of us do it when we put money in deposit accounts. </p>
<p>Our banks might pretend they are giving us (a small amount of) interest, but in practice it’s often drowned out by the fees, meaning we end up paying them to take our money.</p>
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<a href="https://images.theconversation.com/files/375348/original/file-20201216-23-1ad72bi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/375348/original/file-20201216-23-1ad72bi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/375348/original/file-20201216-23-1ad72bi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=971&fit=crop&dpr=1 600w, https://images.theconversation.com/files/375348/original/file-20201216-23-1ad72bi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=971&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/375348/original/file-20201216-23-1ad72bi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=971&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/375348/original/file-20201216-23-1ad72bi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1220&fit=crop&dpr=1 754w, https://images.theconversation.com/files/375348/original/file-20201216-23-1ad72bi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1220&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/375348/original/file-20201216-23-1ad72bi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1220&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><span class="source">Chingfoto/Shutterstock</span></span>
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<p>We do it because it is convenient, and a lot safer than storing the money under our floorboards.</p>
<p>The same sort of convenience is at play when a large financial firm finds itself stuck with half a billion dollars. </p>
<p>Storing it can be daunting. A billion dollars of physical cash weighs around 10 tonnes (even more, if it isn’t in $100-dollar bills), roughly equivalent to four Toyota Hilux! </p>
<p>Not only is cash a physical burden you also need to keep it secure which adds to the cost of holding it.</p>
<h2>Lenders want safe storage</h2>
<p>Getting an institution to take their money, even paying it to take it, thus isn’t a bad alternative.</p>
<p>And for safe custody, minus 0.01% might be a better rate (a less negative rate) than the firm can get elsewhere. Lending at minus 0.01% costs some money, but buying a safe and hiring security may well cost more.</p>
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Read more:
<a href="https://theconversation.com/5-ways-the-reserve-bank-is-going-to-bat-for-australia-like-never-before-149311">5 ways the Reserve Bank is going to bat for Australia like never before</a>
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<p>And if the Australian dollar goes up before the loan expires, they might get back more than they lent when measured in foreign currency terms, negative interest rates notwithstanding.</p>
<p>The Australian government wanted to borrow $1.5 billion on that Thursday. It was flooded with $8.2 billion of offers, most of them offering a slightly positive interest rate.</p>
<h2>It’s how Australia compares that matters</h2>
<p>That’s how keen investors are to park money with the Australian government. It’s why the dollar has been climbing as Australia increasingly looks to be a safer place to invest than countries still being ravaged by the coronavirus.</p>
<p>A lot depends on the alternatives. If rates dive further overseas, more deeply negative rates here will be enough to satisfy some lenders. </p>
<p>If good moderately-safe investment opportunities turn up outside of the government sector (<a href="https://theconversation.com/it-isnt-right-to-say-we-are-out-of-recession-as-these-six-graphs-demonstrate-151210">if only</a>) investors will look there instead.</p>
<p>Now that negative rates have arrived, there’s no telling where they’ll go.</p><img src="https://counter.theconversation.com/content/152082/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Isaac Gross does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Australia is being paid to borrow. For those funds at least, borrowing is the opposite to a burden on the budget.Isaac Gross, Lecturer in Economics, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1435982020-07-29T20:01:40Z2020-07-29T20:01:40ZWe’ve just sold $15 billion 31-year bonds. What’s a bond?<figure><img src="https://images.theconversation.com/files/350088/original/file-20200729-27-1i6some.jpg?ixlib=rb-1.1.0&rect=0%2C369%2C5615%2C2648&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Boxing Day sale.</span> <span class="attribution"><span class="source">Lefteris Pitarakis/AP</span></span></figcaption></figure><p>There are the Boxing Day sales, and there was this week’s rush of extremely cashed-up investors desperate to get a slice of this week’s rare 31-year government bond auction.</p>
<p>What’s a bond? What’s a bond auction? We’ll get to those shortly.</p>
<p>First, just know that the government received <a href="https://www.aofm.gov.au/program/forthcoming-transactions/pricing-new-june-2051-treasury-bond">A$36.8 billion</a> of bids, <a href="https://www.afr.com/markets/debt-markets/new-30-yr-government-bond-attracts-over-20b-of-bids-20200727-p55frl">$20 billion</a> of them within hours of opening the two-day auction on Monday.</p>
<p>It had been wanting to move <a href="https://www.aofm.gov.au/program/forthcoming-transactions/pricing-new-june-2051-treasury-b">$15 billion</a>, and could have moved that much again.</p>
<p>$15 billion makes it the third biggest bond sale in Australian history. The two bigger were recent – a $19 billion ten-year bond sale in May and a $17 billion five-year bond sale in July.</p>
<p>Each sale nets the government money it won’t have to pay back for five, ten or 31 years at rates of interest that until recently would have been unthinkably low.</p>
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Read more:
<a href="https://theconversation.com/more-than-a-rate-cut-behind-the-reserve-banks-three-point-plan-134140">More than a rate cut: behind the Reserve Bank's three point plan</a>
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<p>The 31-year bond went for 1.94%. That means the foreign and Australian investors who bought them (including Australian super funds) were prepared to accept less than the usual rate of inflation right through until 2051 in return for regular government-guaranteed interest cheques.</p>
<p>Investors who bought ten year bonds were prepared to accept only 0.92% per year, investors who bought five year bonds, only 0.40%.</p>
<h2>What’s a bond?</h2>
<p>Even bond traders find it hard to get a handle on what bonds are. In his novel <a href="https://www.goodreads.com/book/show/306424.Bombardiers">Bombardiers</a>, author Po Bronson writes a scene where a bond trader refuses to work any more and demands to see an actual bond, “any kind of bond”.</p>
<p>He tells his boss he can’t sell bonds “if he’s never seen one”.</p>
<p>Like many things that used to exist physically, they’re now mainly numbers on screens, but it helps to get a picture. </p>
<p>This one is a US 27-year bond from 1945.</p>
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<a href="https://images.theconversation.com/files/350098/original/file-20200729-33-u4eet9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/350098/original/file-20200729-33-u4eet9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/350098/original/file-20200729-33-u4eet9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=520&fit=crop&dpr=1 600w, https://images.theconversation.com/files/350098/original/file-20200729-33-u4eet9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=520&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/350098/original/file-20200729-33-u4eet9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=520&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/350098/original/file-20200729-33-u4eet9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=654&fit=crop&dpr=1 754w, https://images.theconversation.com/files/350098/original/file-20200729-33-u4eet9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=654&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/350098/original/file-20200729-33-u4eet9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=654&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><a class="source" href="https://www.theherbstmancollection.com/dedication">The Joe I. Herbstman Memorial Collection</a></span>
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<p>The biggest part of the paper is a promise to repay the US$1000 it cost, in 27 years time.</p>
<p>The smaller rectangles are called coupons, and each year the owner can tear one off and take it in to get 2.5%.</p>
<p>If the owner wants to sell the bond to someone else (and bonds are traded all the time) it’ll be sold with one coupon missing after one year, two coupons missing after two years, and so on.</p>
<h2>When rates fall, prices rise</h2>
<p>The price of a bond will vary with what’s happening to interest rates. If they are falling, an existing bond, offering returns at old rates, will become more expensive and can be sold at a profit. If they go up, an existing bond will become worth less and have to be sold at a loss.</p>
<p>It leads to confusion. When bond rates fall, bond prices rise, and visa versa.</p>
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Read more:
<a href="https://theconversation.com/yield-curve-control-the-reserve-banks-plan-for-when-cash-rate-cuts-no-longer-work-133223">'Yield curve control': the Reserve Bank's plan for when cash rate cuts no longer work</a>
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<p>For half a decade now bond rates have been falling. They’ve fallen further during the COVID crisis, making bonds a doubly good investment. They offer superannuation funds and others certainty at a time when everything seems uncertain, and if rates continue to fall they increase in value.</p>
<p>It is an indictment of our times that so many investors want them. The government’s <a href="https://www.aofm.gov.au/">office of financial management</a> is going to need to sell an extra $167 billion over the coming year. The rush to buy suggests it could sell more.</p><img src="https://counter.theconversation.com/content/143598/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Martin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>To understand what bonds are, it helps to see a picture.Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1385272020-05-14T04:48:16Z2020-05-14T04:48:16ZWhat’ll happen when the money’s snatched back? Our looming coronavirus support cliff<figure><img src="https://images.theconversation.com/files/334908/original/file-20200514-167748-1lnq5xh.jpg?ixlib=rb-1.1.0&rect=362%2C164%2C2956%2C1268&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>At almost 10% of gross domestic product, and a much larger per cent of government spending, Australia’s fiscal response to the COVID-19 crisis has been <a href="https://blog.grattan.edu.au/2020/04/covid-19-australias-fiscal-response-is-now-among-the-biggest-in-the-world/">one of the biggest in the world</a>. </p>
<p>The government is spending an average of A$26 billion a month on programs that didn’t exist in February. </p>
<p>To put that in perspective, before COVID-19 the government’s total average monthly expenditure this financial year was going to be $42 billion.</p>
<p>While far from perfect, these emergency measures have been successful at supporting the incomes of many households and businesses.</p>
<p>But, as this chart shows, each and every one will be gone by the end of October, making October a very dangerous time for businesses and for the economy.</p>
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<a href="https://images.theconversation.com/files/334880/original/file-20200514-167768-113ud9d.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/334880/original/file-20200514-167768-113ud9d.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/334880/original/file-20200514-167768-113ud9d.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=329&fit=crop&dpr=1 600w, https://images.theconversation.com/files/334880/original/file-20200514-167768-113ud9d.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=329&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/334880/original/file-20200514-167768-113ud9d.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=329&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/334880/original/file-20200514-167768-113ud9d.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=414&fit=crop&dpr=1 754w, https://images.theconversation.com/files/334880/original/file-20200514-167768-113ud9d.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=414&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/334880/original/file-20200514-167768-113ud9d.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=414&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>In his <a href="https://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/speeches/ministerial-statement-economy-parliament-house-canberra">address to parliament</a> on Tuesday, Treasurer Josh Frydenberg spoke of a return to work as restrictions were eased.</p>
<p>But he noted that any new outbreaks of COVID-19 could see restrictions re-imposed at a loss of more than $4 billion per week to the economy.</p>
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<a href="https://images.theconversation.com/files/334889/original/file-20200514-167736-1s0luk8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/334889/original/file-20200514-167736-1s0luk8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/334889/original/file-20200514-167736-1s0luk8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=971&fit=crop&dpr=1 600w, https://images.theconversation.com/files/334889/original/file-20200514-167736-1s0luk8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=971&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/334889/original/file-20200514-167736-1s0luk8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=971&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/334889/original/file-20200514-167736-1s0luk8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1220&fit=crop&dpr=1 754w, https://images.theconversation.com/files/334889/original/file-20200514-167736-1s0luk8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1220&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/334889/original/file-20200514-167736-1s0luk8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1220&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Treasurer Frydenberg’s address to parliament.</span>
<span class="attribution"><span class="source">MICK TSIKAS/AAP</span></span>
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<p>Even if things go to plan, the harsh reality is that big parts of the economy are still likely to be <a href="https://grattan.edu.au/wp-content/uploads/2020/04/Shutdown-estimating-the-COVID-19-employment-shock-Grattan-Institute.pdf">doing less than they should</a> for some time yet. </p>
<p>Most of the world has not fared as well as Australia in limiting deaths and the spread of the virus, which means global economic activity and demand will be weak <a href="https://www.abc.net.au/news/2020-04-14/imf-forecasts-big-coronavirus-growth-hit/12147818">for some time</a>.</p>
<p>Businesses and consumers are likely to be cautious. Many will find themselves financially challenged because their <a href="https://www.ausbanking.org.au/covid-19/the-business-relief-package/">loan</a> and <a href="https://www.business.gov.au/Risk-management/Emergency-management/Coronavirus-information-and-support-for-business/Relief-for-commercial-tenancies">rent</a> obligations were deferred rather than removed during the crisis. </p>
<p>Australia’s population growth will be much slower because of the reduction in <a href="https://www.sbs.com.au/news/coronavirus-has-halted-immigration-to-australia-and-that-could-have-dire-consequences-for-its-economic-recovery">temporary migration</a>, hitting consumer-facing businesses and the broader economy.</p>
<p>Against this backdrop, the sudden withdrawal of massive government spending will leave an enormous hole in economy activity and the incomes of business and households.</p>
<p>The chart below shows that huge amounts of government support (more than 25% of gross domestic product) scheduled to vanish by the end of October.</p>
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<a href="https://images.theconversation.com/files/334881/original/file-20200514-167776-16s2kdw.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/334881/original/file-20200514-167776-16s2kdw.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/334881/original/file-20200514-167776-16s2kdw.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/334881/original/file-20200514-167776-16s2kdw.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/334881/original/file-20200514-167776-16s2kdw.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/334881/original/file-20200514-167776-16s2kdw.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/334881/original/file-20200514-167776-16s2kdw.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/334881/original/file-20200514-167776-16s2kdw.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>It’s a recipe for a second downturn.</p>
<p>A much better approach would be to remove the measures slowly.</p>
<p><a href="https://theconversation.com/australias-130-billion-jobkeeper-payment-what-the-experts-think-135043">JobKeeper</a> could be wound back in line with the recovery of individual businesses. </p>
<p>Reassessing eligibility after most physical distancing restrictions have been removed, particularly if the health situation is well controlled, seems sensible.</p>
<h2>Support should end early for some, late for others</h2>
<p>If the revenues of some businesses rebound to close to pre-coronavirus levels, they could come off JobKeeper early, before the September deadline.</p>
<p>But if the revenues of others remain weak because their operations are still constrained by health restrictions, the government could consider extending their JobKeeper payments beyond September.</p>
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Read more:
<a href="https://theconversation.com/that-estimate-of-6-6-million-australians-on-jobkeeper-it-tells-us-how-it-can-be-improved-137237">That estimate of 6.6 million Australians on JobKeeper, it tells us how it can be improved</a>
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<p>Targeting support to the firms that need it most in this way would be a better use of taxpayers’ money – and it would help stop the economy falling off a “cliff” in late October.</p>
<p>The <a href="https://theconversation.com/coronavirus-supplement-your-guide-to-the-australian-payments-that-will-go-to-the-extra-million-on-welfare-134358">JobSekeer supplement</a> could also be phased out more slowly than the government currently plans.</p>
<h2>JobSeeker should stay higher than it was</h2>
<p>The treasurer should settle on a <a href="https://grattan.edu.au/wp-content/uploads/2019/04/916-Commonwealth-Orange-Book-2019.pdf">new level of income support</a> – lower than JobSeeker with the supplement but probably $75 to $100 a week better than JobSeeker without the supplement – so that people on it are spared significant financial distress while searching for work.</p>
<p>It could also announce a range of measures to boost demand in the danger zones that will be created by supports coming off.</p>
<p>There are plenty of good options.</p>
<ul>
<li><p>one-off cash payments to households, which we know have <a href="https://www.alphabeta.com/illiontracking"> boosted spending</a></p></li>
<li><p>more spending on mental health services or programs to help disadvantaged students catch up on learning lost</p></li>
<li><p>infrastructure spending on shovel-ready projects with good returns to the community including <a href="https://blog.grattan.edu.au/2019/09/learning-from-past-mistakes-lessons-from-the-national-rental-affordability-scheme/">social housing</a>, roads and school maintenance</p></li>
</ul>
<p>Debt will need to be managed over the medium term, but it shouldn’t constrain the government from implementing the policies needed to drive recovery.</p>
<p>On Wednesday the Office of Financial Management unloaded $19 billion of new 10-year bonds in the biggest bond sale in Australian history, after receiving bids for more than <a href="https://www.afr.com/markets/debt-markets/we-got-this-covered-pm-buoyed-by-record-19b-bond-sale-20200513-p54sip">twice that many</a>.</p>
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Read more:
<a href="https://theconversation.com/were-it-not-for-jobkeeper-unemployment-would-be-11-7-up-from-5-2-in-one-month-heres-how-the-numbers-pan-out-138268">Were it not for JobKeeper, unemployment would be 11.7%, up from 5.2% in one month. Here's how the numbers pan out</a>
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<p>It will pay an interest rate of <a href="https://www.aofm.gov.au/program/forthcoming-transactions/pricing-dec-30">1.025%</a>, which is less than the rate of inflation.</p>
<p>Transitioning the economy from emergency settings to business as usual will not be easy, but there’s no imperative to do it suddenly.</p><img src="https://counter.theconversation.com/content/138527/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The Grattan Institute began with contributions to its endowment of $15 million from each of the Federal and Victorian Governments, $4 million from BHP Billiton, and $1 million from NAB. In order to safeguard its independence, Grattan Institute’s board controls this endowment. The funds are invested and contribute to funding Grattan Institute's activities. Grattan Institute also receives funding from corporates, foundations, and individuals to support its general activities as disclosed on its website.</span></em></p><p class="fine-print"><em><span>Nathan Blane does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Every one of Australia’s coronavirus support payments is due to end by the end of October. It’ll leave a gaping hole.Danielle Wood, Program Director, Budget Policy and Institutional Reform, Grattan InstituteNathan Blane, Analyst, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.