Tom Crowley

It's those lasting scars, because we know from all the evidence that when people are thrown out of work in recessions, in normal times, they find it harder to get back in.

It's particularly true for young people who have their early experience of the job market tarred by a recession time.

You see that all the way through their lives and their lifetime earning potential.

And of course, what a scarring thing it is for, say, a small business owner who loses their business.

That's why governments have been so inclined to go hard and go early when it comes to stimulus during recessions.

And it's why, I guess, the point that I was making in the piece that you referred to earlier this week, it's why I think if this does become a really deepening recession,

the inflation risk and all the other economic risks, the productivity problem might be parked for a little bit while the government just tries to really wrap the economy in a little bit of cotton wool.

Because as we see this oil shock reverberate through all the parts of the economy that use fuel,

And then all the fuel-derived products, plastics, fertilizers also affected.

All of a sudden, you just have in so many sectors at the moment, business groups reporting a farmer choosing between two crops, a trucker saying that they can't afford their regular amount of traffic, industrial big producers deciding, making calls over the next few months about whether they take on a new project, whether a builder starts a house that's been approved.

All of these questions, they're made over pretty long time horizons.

And I think one of the important messages in economics is that the future happens today.

When people have expectations that things will get worse, when people are pessimistic about the future, it affects the financial decisions they make right now.

And as soon as everybody decides to stay home, hold on to their purse strings, do less in a business sense, you're already in recession territory because GDP, just the production in the Australian economy, is lower.

And then if that gets into uncontrolled territory where people start laying people off, as you say, and businesses start shuttering,

That's a really, really hard thing to unwind.

And it's the kind of permanent lasting damage that governments have some tools to minimise.

I think it's changing again by the day and by the hour.

One thing that Jim Chalmers is emphasising a lot is that budgets don't get finalised.

There's a long time to go until May and who knows what the world might look like and the economic outlook might look like by the middle of May.