Guy Debelle: The Reserve Bank of Australia's policy actions and balance sheet

Remarks by Mr Guy Debelle, Deputy Governor of the Reserve Bank of Australia, to The Economic Society Australia, online, 30 June 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Australia is experiencing an historic event. It is first and foremost a health event. Thankfully, thus far the health outcomes in Australia have been better than feared. The health decisions taken by the government and the public in response to the virus have been the primary shaper of the economic and financial landscape that the Reserve Bank has been operating in.

The virus has had a large economic and financial impact. The decline in output in the second quarter in Australia and around the world has been extraordinary, as significant parts of the economy were shut down. The decline in output is much larger and much more widespread globally than we saw in 2008. Accompanying this, there has been a large decline in hours worked. Unemployment has risen sharply, although the extent of the rise in the unemployment rates has varied around the world depending on the nature of the support provided by governments (as well as some definitional differences). In Australia, the rate of unemployment is high at 7 per cent, but has been materially contained by the JobKeeper package that has helped to maintain the employment relationship between workers and businesses. This will help considerably in the recovery.