Australia plagued by swarms of zombie companies? Undead beasts that roam the landscape? Not a problem, says our RBA governor. In fact, good news.
So-called zombie companies are entities whose business model is no longer working and who are no longer profitable. They would usually go broke, but in these unusual times they live on past their use by date.
Economists were worrying about zombie companies even before the latest crisis, as loose money and easy lending meant firms could easily load up on fresh debt at relaxed interest rates, keeping them alive when by rights they would have failed. The zombie horde has grown many-fold in 2020, thanks to the JobKeeper payment that means firms have their staff costs covered.