Researchers and advisors have tapped into new sources of data to help navigate the economic fallout from the COVID-19 pandemic in Australia.
Andrew Charlton, founder of Alphabeta and senior economic advisor to the Rudd government, noted policy making often can’t wait for official statistics to be tallied.
“I worked in government during the global financial crisis and the data was just very slow,” said during the AFR and Microsoft’s Reshaping Australia Dialogues series.
“I remember flying back from New York just after Lehman Brothers had fallen and we had a sense that this was a huge economic event that was going to hit Australia. As we were thinking about the policy agenda that would be required, our first question was, how bad is the Australian economy right now and how fast are things falling?”
“And the truth is we just didn’t have the data to answer that question because official statistics operate with a lag. We get GDP data somewhere between three and five months after the event.”
“And so a lot of big decisions, multibillion dollar stimulus decisions, huge policy implementations are made of very partial data, and they need to be made quickly and you can’t wait for the data if you wait for the data it’s too late.”
More than a decade later and Australia’s digital infrastructure within public and private organisations, has provided close to real time data which has helped inform government policy.
Charlton highlighted ABS and ATO single touch payroll data as an indicator of employment trends, data from the the banks on spending and mortgage freezes, and data from accounting platform Xero which has highlighted trends in small business. Alphabeta has also been working with software company Illion to provide weekly data on the impact of COVID-19 on the Australian economy.
“In this crisis we have seen lots of new sources of data being harnessed for good,” Charlton said.
“And all of this data I feel has helped us respond more quickly. Some of the big policies that have been put together and the fine tuning of those policies have been done very rapidly in this crisis, partly building off those new sources of data. Good quality data is the raw material of good quality decisions.”
Charlton also argued policy makers should use the crisis to reshape the Australian economy and as part of that, accelerate the growth of Australia’s digital economy.
“If we’re successful in building a reform agenda, I think that digital will be a huge part of it,” Charlton said.
“If the theme of the last great era of Australian reform was internationalising the Australian economy, opening us up to the world taking advantage of globalisation, then the theme for the next great era of reforms should be digitisation.”
He argued there wasn’t one specific digital project but a broad mindset shift that would enable a step change in our digital capability across all sectors.
“It’s about changing the mindset of Australians in every business small and large… to recognise that digital is the future of so much economic growth.”