Governments 'massively overreacted' to COVID-19 crisis

Former Reserve Bank chief economist Andrew Stone says it's "madness" that state and federal governments are waiting until July to fully open up the economy, warning the economic cost of the coronavirus response will have "enormous ramifications" for years to come.

The National Cabinet has agreed on a three staged plan that will gradually allow businesses to re-open as the cases of the deadly COVID-19 continue to plateau.

Despite the road map, states have the final say on when the businesses can re-open, with the economy not expected to return to even a semblance of normality until July.

While the treasurer did not outline exactly how much the COVID-19 crisis is costing the federal government, private sector group Deloitte Access Economics predicted Australia's budget will be up to $143 billion in deficit this financial year and $132 billion next financial year.

Mr Stone told Sky News the "governments have massively overreacted" to the pandemic.

"For a period that was understandable, but we have had less than 100 deaths from the coronavirus, " he said.

"If you are talking about a situation where you start to run 100 billion deficits, you are talking about more than a billion dollars for every death."

"We are talking about having the economy, more or less, fully opened up by July, but that's two months away, we should be massively accelerating that program."

Image: AP

Видео Governments 'massively overreacted' to COVID-19 crisis канала Sky News Australia