Charting Australia’s recovery from the COVID-19 pandemic will be a key challenge for the next government. Both major parties have tried to reassure voters that they will be responsible economic managers in what are still unpredictable times.
As Australians head to the polls the cost-of-living has soared to a 21-year high. Recent inflation figures stood at 5.1%.
Summer Hamze, a grocery store owner in Sydney, wants the government to do more to curb rising prices.
“With the inflation, actually, we do need the government to get that under control because it is out of control. It is just rising and rising and rising, and people are getting really scared, really scared these days,” he says.
But analysts say inflation is fuelled largely by market forces both at home and overseas.
In Australia, the Reserve Bank, which is independent of the government, uses interest rates to try to control inflation and influence consumer spending.
Massive government expenditure during the pandemic protected jobs and businesses. But some academics say politicians can overstate their influence over the economy.
Michelle Baddeley is a professor of economics at the University of Technology, Sydney.
“I think, yes, there is a bit of claiming more ground than they really can control. The reality is a bit of a mixture because certainly, and COVID illustrated this pretty well, governments can do a lot in terms of spending money to generate employment in the short-term,” she notes.
Businesses say a key part of the government’s job is instilling confidence, as well as overseeing nation-defining infrastructure projects and recovery from natural disasters, including this year’s floods in eastern Australia.
Reducing the cost of health care and tackling climate change are other main issues for Australians as election day approaches.
Opinion polls have indicated the center-right government led by prime minister Scott Morrison is heading for defeat.
His coalition has been in power since 2013.
Australia’s Reserve Bank is forecasting the domestic economy will grow by just over 4% in 2022.
Unemployment rate is expected to fall gradually to 3¾% by the end of 2023.