Australia is living through the biggest economic and social disruption it has had in decades as a result of COVID-19.
Treasurer Josh Frydenberg predicted the deficit of the current financial year will be $184.5 billion, which came as a shock to most Australians on Thursday.
“The Australian economy is navigating its worst performance since the 1930 Great Depression,” one of Australia’s foremost economists Stephen Koukoulas told Neos Kosmos on Thursday following Treasurer Frydenberg’s economic update.
The shocking stats may have triggered emotions in Greeks who lived through the Greek debt crisis, but economists say that even at its worse and even with the variables, Australia is still in better shape.
“It is important to note that the expected increase in government debt is manageable, being well below most other countries, and especially Greece, which has government debt approximately five times larger (as a share of GDP) than Australia will have,” Mr Koukoulas said.
Dimitris Salampasis, Director for the Master of Financial Technologies at Swinburne Data Science Research Institute, did not leave Greece to come to Australia in 2017 as a result of the Greek debt crisis but his success story is nonetheless typical of many Greeks hwo fall under the ‘brain drain’ cohort. For him there’s no comparison between the affects of the global pandemic on Australia and Greece’s tribulations during the economic crisis. “I don’t think there’s a real correlation with the Greek financial crisis due to the fact that Greece had a very high debt with lots of structural issues, belonging at the same time to the European Union, which requires compliance with a broader supranational regulatory and financial regime,” he said.
“I would say that this is ‘both a wish and a curse’. If Australians show a forward-thinking mentality and readiness, they will not go through the same ordeal as the Greek population during the financial crisis.”
Kosmas Smyrnios, Professor of Family Business Entrepreneurship at RMIT, agrees that Australia’s woes are “quite the opposite of what Greece experienced” as the two countries are like chalk and cheese.
“In Australia, the fundamentals were in place so there were strong foundations,” Mr Smyrnios said.
He said that in 2019, Treasurer Frydenberg had said that the government would deliver a budget surplus of $5 billion in the 2019-2020 financial year. Months later COVID-19 struck.
“In Greece, that was quite the opposite. They had a deficit, their GDP was not one they were able to contend with,” Mr Smyrnios said. “We are still in a better condition than Greece was.”
As for the worry. Mr Salampasis said it is due to inexperience. “Let’s not forget that Australians have not experienced a recession for more than 30 years now, so this is something new and even painful and stressful for many,” he said.