Australian Government restrictions introduced in response to the COVID-19 pandemic led to a sharp fall in economic activity in some service industries and the curtailment of the international movement of people. The Jobkeeper program was intended to minimise the resulting dislocation in the labour market by keeping people in their existing jobs in the affected industries while the restrictions were in place. Jobkeeper and other budget stimulus measures have also led to a large increase in government debt. This economic upheaval has been seen as an opportunity for budget and other economic reforms. This paper uses a macro-econometric model of Australia (Murphy, 2020) to quantify this story. It analyses the economic effects of the COVID-19 restrictions on the Australian economy, the effectiveness of Jobkeeper and other budget policy responses, and options for budgetary reforms.

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