Australia is firmly in the middle of the pack when it comes to Covid recovery spending, according to two projects tracking the global response. But some experts say that’s fine as the kind of stimulus programs that have been pursued in harder-hit countries weren’t needed.

“I think we were in dire need last year. I think we are in slightly less dire need right now because our unemployment rate has bounced back because we got it largely under control,” says University of New South Wales economics professor Richard Holden.

“That said, it is very clear from this budget and it is very clear from Treasury and Reserve Bank analysis of how low the unemployment rate can get before inflation really starts moving that we are going to be targeting an unemployment rate around 4% or maybe even lower ... That’s a lot of jobs that need to be created, a lot of people that need to be put to work.”

In total the federal budget papers estimate that A$291bn has been spent in direct economic support since the beginning of the pandemic. This equals 14.7% of GDP.

However, this is lower than the spending estimate of the Centre for Economic Policy Research’s economic stimulus index, which includes state government revenue and spending measures.

As of 6 May, before the federal budget was handed down, its data shows Australia had announced fiscal measures equal to 17% of GDP – significantly lower than Japan, which had committed funding equal to 54% of GDP.

Singapore had committed 29%, the United States 26% and Germany 20% of their respective GDPs.

The Oxford University Economic Recovery Project has been tracking Covid-19 recovery spending announced by 50 countries around the world.

“Covid-19 has brought with it the greatest global economic correction since world war two; worldwide unemployment is high, economic product is low, and poverty has increased for the first time in a quarter of a century,” says Brian O’Callaghan, Australian economist and the engineer who leads the Economic Recovery Project.

“Public investment acts as a stimulus to get the economic gears of a nation turning at full pace once again. Governments can use recovery spending to orient an economy towards future growth industries while also providing immediate boosts to employment and economic production (GDP).”

Guardian Australia added recent infrastructure and Covid-19 packages from Australia, the United Kingdom, United States and South Korea.

This included $15.2bn and $28.5bn Australian dollars the federal government recently announced in infrastructure spending and tax measures.

“[The Australian infrastructure spending] is a lot. That is one-and-a-half times the normal level of investment in transport,” says the Grattan Institute’s transport and cities program director Marion Terrill.

“The budget took us back to transport megaprojects. And that’s after a short break in the past budget where the biggest single contribution from the commonwealth was $750m. In this budget the commonwealth put in $2bn or more into three whopping great big projects.”

The budget included $2bn for an intermodal terminal in Melbourne, $2.6bn for the Anzac Highway in South Australia and $2bn for the Great Western Highway in NSW.

But many other countries have been comparatively more ambitious. The UK has committed £58bn and £20bn for road and rail upgrades, and its long-term housing strategy. Spain has earmarked upwards of €8bn for energy and infrastructure projects.

China has announced a stream of new projects, from renovating old roads to high-speed rail, and nuclear and solar power.

Terrill questions whether big infrastructure projects are necessarily good stimulus, especially as they often have long lead times. The sheer number of large infrastructure projects around the world will also drive up costs.

“They are drawing on the resources of an industry that is already overstretched. Before the pandemic, engineering and construction was already hitting its limits. The number working in the sector had surged by 50% in the three years leading up to the pandemic. And it’s not like the mining boom where we imported more skilled workers from overseas to make up the shortfall. The borders are shut now and government transport construction has been pretty recession-proof.”

O’Callaghan also notes that the kind of mega projects Australia is pursuing are more traditional infrastructure, of the “gas-led recovery” variety, rather than renewable energy or other clean projects that others are pursuing.

“Australia has been one of the worst high-income nations on green recovery, if not the very worst. Whereas nations like Denmark, Germany, the UK, and Korea have dedicated up to 60% of recovery spending to green initiatives, prior to the federal budget, only 2% of Australian recovery spending was green”, says O’Callaghan.

Richard Holden noted that this may be due to a lack of such projects in the pipeline long before the pandemic hit.

“We should have a lot of green, shovel-ready projects to do green stimulus if we are in a need to stimulate the economy we ought to be able to rollout, whether it is dune care or building cycleways or waterway cleanup – a whole range of things that tend to be relatively labour-intensive that would be a good way to spend money, “says Richard Holden.

“It would put people back to work in a recession and things like that, and also help the natural environment.”

Notes and methods:

• Ceyhun Elgin, Gokce Basbug and Abdullah Yalaman used the IMF’s policy response tracker to decide what fiscal measures to include in their dataset

• Guardian Australia supplemented the Oxford Recovery Observatory dataset with measures announced after 28/02/2021 (and listed in the IMF’s policy response tracker) for the United States, United Kingdom and South Korea

• Guardian Australia used the Australian federal government’s list of Covid-19 economic support measures to supplement the Oxford Recovery Observatory dataset for Australia

• Categorisation of the American Rescue Plan sourced from the Wall Street Journal

• South Korea’s Extra Budget data sourced from the Yonhap News Agency

• Newly announced infrastructure and revenue measures from Australia, South Korea, the US and UK were added to the Oxford Recovery Observatory dataset and classified according to the typologies in their methodology.

• Traditional transport infrastructure investment, Clean transport infrastructure investment, Traditional energy infrastructure investment, Clean energy infrastructure investment, Local (project-based) infrastructure investment”, Buildings upgrades and energy efficiency infrastructure investment, Natural infrastructure and green spaces investment and Other large-scale infrastructure investments; were classified “Infrastructure spending”

• Direct provision of basic needs, Targeted recovery cash transfers, Worker retraining and job creation, Job continuation support, and Targeted welfare cash transfers; were classified “Transfers and job support”

• Income tax cuts, VAT and other goods and services tax cuts, Business tax cuts, Business tax deferrals, Other tax cuts and deferrals; were classified “Tax measures”

• Liquidity support for large businesses, Liquidity support for start-ups and SMEs; were classified “Liquidity support”