It’s official: Australia has announced its first recession in close to 30 years, led by a collapse in household demand amid COVID-19 restrictions on movement, worsening labour market conditions and a move to panic-saving.

Treasurer Josh Frydenberg said Australians should brace themselves or further bad news in the September quarter, with the impact of Victoria’s second lockdown not captured in the new figures.

“Today’s devastating numbers confirm what every Australian knows – COVID-19 has wreaked havoc on our economy and our laws. It is nothing we have ever experienced before,” he said.

But the Treasurer was frank when asked whether JobKeeper payments should be kept at $1500 because of the downturn, saying it would still be necessary to taper off the support heading into October.

Instead, Mr Frydenberg again raised the prospect of supply-side reforms in the October budget, such as cutting red tape for businesses and lowering taxes.

“How do we make it easier for businesses to do business? That is where, without great cost to the budget, you can unlock the entrepreneurship and innovation of our businesses, and that is about cutting red tape,” Mr Frydenberg said.

The federal government is expected to make announcements of new support packages over the coming days.

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