The Recovery Book: What Australian governments should do now

What governments should do in the recovery period of COVID-19


To help Australia recover from the COVID-19 recession, the Federal Government should inject $70 billion to $90 billion in extra economic stimulus, including revamping and extending JobKeeper, according to a new Grattan Institute book.

The Recovery Book: what Australian governments should do now is a policy and strategy blueprint for federal, state, and territory governments, including for hospitals and health care, schools and universities, roads and trains, budgets and energy.

Social Housing

The strategy argues that if governments want to get unemployment back down to 5 per cent or below by mid-2022 then they will need to be prepared to add to the temporary stimulus by spending another $20-to-$40 billion on services, infrastructure, and building social housing, depending on how the economic recovery plays out. Assuming interest rates remain low, governments should be in no rush to consolidate their budgets while economies remain weak in Australia and across the globe.

It recommends the Commonwealth deploy substantial further fiscal stimulus (incl. support for business and workers, social housing, and small-scale infrastructure).

The number of social housing dwellings has barely grown over the past two decades, while Australia’s population has increased by 33 per cent. Building 30,000 new social housing units today would cost between $10 billion and $15 billion. The Federal Government should fund the states to build social housing units directly or to engage community housing providers as housing developers. A similar initiative during the GFC resulted in 19,500 social housing units being built and another 80,000 refurbished over two years, at a cost of $5.2 billion.

Residential Construction

The boost to residential construction was nearly immediate: public residential construction approvals spiked within months of the announcement. A similar investment today would provide a big boost to the construction industry, which accounts for nearly one in 10 Australian workers. Around 6 per cent of all construction workers were out of work as of 30 May this year, and forecasts point to a severe downturn in the sector in the coming months.

The Victorian, Western Australian, and Tasmanian governments have already announced funding to construct new social housing and upgrade existing homes as part of their responses to COVID-19. Building social housing would also help tackle the growing scourge of homelessness. More than 116,000 people were homeless in Australia on Census night in 2016, up from 90,000 a decade earlier. Half of the tenancies housed in the 2008 program were already homeless, or at significant risk of becoming so.

Click here to read the Grattan Institute report in full.