Owen Raskovich

As I'm about to get to, there's a better way to think about this.

The other thing that Commonwealth Bank forecast is, or the other model I should say in scenario, is a prolonged downturn.

And what they're talking about here is a recovery that takes a lot longer.

So we've had coronavirus come through.

It might take some time for all of these people to get back to work, to start feeling confident and having that full wealth effect, the effect that you feel wealthier than actually you are, and therefore you're more confident to go and buy things like TVs from JB Hi-Fi or a new couch from Harvey Norman.

So in this second model, which is the one the media has jumped onto, of course,

CBA's experts have said, we are modeling for GDP, gross domestic product, to fall 7% in calendar year 20, then negative 8%, so it's still going backwards in calendar year 2021, and then 2.3% growth, so it's coming back a little bit, in calendar year 2022.

So we've got negative 7%, negative 8%, positive 2.3%.

That's obviously more negative than the first scenario, and it's coming back a bit slower.

So you can see that's why they call it a prolonged downturn.

The other figure, of course, is unemployment.

And they're saying, if we do this same model, we're suggesting 9% unemployment, 8.5% unemployment in the second year, which is calendar year 2021, and 6.5% unemployment still in calendar year 2022.

So we have 9%, 8.5% and 6.5% unemployment.

You can see that those first two figures, if you've kept a good mental memory of this, if you've got something, maybe you've got a photographic memory, I guess you could apply to a podcast, but you can probably figure that these unemployment figures are a bit more negative.

So they're, you know, 9% unemployment is quite high for Australia.

It's actually very high if it's sustained.

And 8.5% is still quite high again.

That means, you know, 9%, nine out of every 100 people,

that should be employed aren't employed.

And of course, what's the outcome from this?