To tell us more about what's been making headlines in finance and economic news this week, we're joined now by Brian Parker, who's the chief economist at Sunsuper. Welcome, Brian. Good morning to you.
Yesterday, as Fazzio was saying, we had the prime minister announced that stage lifting of restrictions in Australia and Treasury has flagged that 850,000 people are expected to return to work by July. Is that overly optimistic, in your opinion?
I would say it's a little bit optimistic, but not massively so. I think that the government had done a reasonable job of sort of, I suppose, pushing the blow of this downturn and also making it more likely that people can be brought back to work relatively quickly. If anything, I think the big ingredient here is the fact that our infection rates have just come down. That's been really, really impressive. And that's certainly a better outcome than a lot of the Treasury forecast, the initial Treasury expectations, I suspect, were based on a much worse outcome for infection rates and hence the more delayed restart to the economy.
But the fact that the infection rates have come down, you know, relatively soon, very, very low levels sort of allows this earlier opening up.
All right, Brian. So the framework for easing the restrictions has been announced. Not all states, however, are taking it on. Some of the states have been infected a lot more like Victoria, New South Wales, a little bit more cautious. But if we're starting to see cafes, restaurants start to open up. The question, though, is with all of this uncertainty and with jobs slowly coming back online. Are people really going to be spending?
Well, that's the really key question, and it's really unknowable at this point. I suspect that, you know, some people will. I can't wait to actually get out of the studio. So I think you will see people come back. But it is going to be more. It is going to be gradual. I think there will be quite a bit of reluctance and a bit of concern out there. But, you know, as long as these are the openings are gradual and it's and it's backed up by evidence that infection rates are staying very, very low.
I think you will see. Look, I think you will see activity come back. It may not come back as quickly as we want, but I'm relatively relatively optimistic on that. And I think if I look at Australia compared to international examples, if you like, I think Australia looks relatively well-placed to this point.
We're looking forward to having you back in the studio, too, at some point, Brian. Now, speaking of lifting restrictions on site auctions in some areas, in some states and territories are starting to happen because they've been happening online now. What has been the impact of of auctions being held not in person?
Well, I'll give you a classic cop out economist answer and say it's just way too difficult to tell because auction volumes have been sort of down significantly for this time of year. And so it's really hard to get a good reading on on property markets when transactions are relatively low. There are some there's still some very bearish forecasts out there, but very, very sharp falls in house prices here in Australia. And that I do think you will see house prices come off at the same time, the fact that we are getting this opening up, this gradual opening up.
The fact that interest rates are now really, really low. Maybe property prices don't actually fall as far as some of those more pessimistic forecasts would suggest. So, again, I'm becoming a little bit more optimistic there. I do think you do see house price declines, but perhaps not the kind of double digit declines which some forecasters have been been expecting.
All right, Brian, let's talk about our superannuation here. And I read somewhere that more than one hundred and fifty thousand Australians have already been paid a portion of their super. I think that amounts to something like one point three billion billion that's already been paid out to them. As I understand it, that's still half a million more applications that still needs to be approved. What sort of an impact does this have having on Supers?
Well, it's all too often so far. And again, I can speak very simple and I can only speak from where I work. And we found that you get it all every day from the ATO and you process that file. We've actually been able to process the overwhelming majority of those applications once we get them fairly quickly. And that's and that's been pleasing. And the system has been able to cope with that in terms of in terms of money going out the door.
You know, the big concern that people have had is that our super funds sufficiently liquid to be able to meet this demand. And so far, the answer is absolutely yes. And that's a good thing. It also means that clearly it also shows you that there's very, very high level of distress in the community, that people have taken advantage of this opportunity. I also think it suggests to me that perhaps the government might end up needing to do more to support people, even though we do have, infection rates have come down a lot faster than people thought.
Some of the worst case scenarios don't seem to be playing out. That's a good thing. But I'm wondering whether even though they sound quite reluctant at this point, I'm wondering with the government may still need to more, because there is still clearly a lot of stress. It certainly does seem to be broad. We're going to have to end it there. And we certainly hope that we see you soon.
Back in the studio, Brian Parker, thank you.
If you are in financial stress as a result of COVID-19, you may be eligible to access up to $10,000 of your superannuation in 2019-20 and a further $10,000 in 2020-21.
The government announced the temporary reduction of drawdown requirements for account-based pensions. This information is relevant for Sunsuper members who have a Retirement income account and Transition to retirement income account.
We are experiencing an increase in demand for withdrawals. We aim to process the uploaded application within 7-10 working days with an additional 3-5 business days to appear in your nominated bank account. The quickest way for Sunsuper to receive your request to withdraw is via Member Online.
It is likely that your super is invested in more than just shares. So yes, returns in your super investment have been sharply negative over recent weeks, but they won't have been as negative as the performance of share markets.
We understand that the current global uncertainty caused by COVID-19 (Coronavirus) might leave you with some questions about your insurance with Sunsuper.
Financial markets remain under severe pressure from the Coronavirus outbreak. Get the latest commentary, podcasts, videos and webinars from Chief Economist Brian Parker on the economic impact, what it could mean for your super, and what (if anything) you should consider doing.