Australian states ease restrictions, road ahead for the economy

  • May 13, 2020 10:50 PM AEST
  • Kunal Sawhney
    CEO Kunal Sawhney
    2781 Posts

    Kunal Sawhney is founder & CEO at Kalkine and is a richly experienced and accomplished financial professional with a wealth of knowledge in the Australian Equities Market. Kunal obtained a Master of Business Administration degree from University of T...

Australian states ease restrictions, road ahead for the economy

The Australian landscape is slowly reviving its original splendour as the country steadily drifts towards safe harbour. The easing restrictions in the nation has opened avenues for economic growth and prosperity, which remained shackled amidst the lockdown.

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In the effort to reboot the troubled business scenario, PM Scott Morrison has announced the ‘three-phased approach’ of implementing eased restrictions. The double-digit unemployment projections remain one of the major worries for the government. Emphasising the government’s focus to bring 1 million Australian back to work, Morrison indicated the staged reopening would work towards building a “sustainable COVID-19 safe economy in July 2020.”

ALSO READ: Morrison Government’s 3 Step Reopening Plan for Economic Recovery

The period of upheaval and uncertainty seems to be subsiding with the flattening of the Covid-19 curve that has shown light at the end of the tunnel. Meanwhile, the Australians circled the wagon to forge a route to restrict the pandemic through the radical adoption of the safety measures. The retreating number of new Covid-19 infections has vitalised the nation to tread along the road to recovery and gear up the economy. The total infection tally as reported on 13 May 2020 sits at 6,975, out of which 98 recorded deaths and 6,271 recovered.

While Victoria and New South Wales are still reporting infection cases, the other states seem to be emerging out of the crisis. Notably, the downtrend in the daily infection rate is facilitating Australia to ease restrictions while most of the other countries stay under stringent measures.

The easing restrictions would mean that many businesses would be back in the saddle providing a forward nudge to the financial state of the country. It would be critical to note the stance adopted by the government and business players concerning the economy to hit out of the park in the next few months.

Eased Restrictions for Business Operations

The phased reopening of Australia is primarily directed towards greasing the wheels of the economic scenario. Many businesses that remained shut during the lockdown would kick-in, empowering the business communities.

The government, in coordination with the Covid-19 Coordination commissions formulated the website that indicates the safety protocol and safety measures for the twenty-three diverse business categories. Meanwhile, the focus would remain on social distancing measures and maintenance of hygiene.

Australian phased plan is allowing the states to move at their own pace considering the difference in the intensity of the conditions. Western Australia is leading the others in terms of restriction easing and the states would lift various Covid-19 restraints. Restaurant, café, and pubs with the limit of 20 people will be allowed to function in the period. The schools will resume from 29 May 2020.

NSW would allow cafés and restaurants to provide the dining services to maximum 10 people at a time. Meanwhile, Victoria still continues to maintain most of the stringent measures. The other states are also opening with necessary set of gathering restrictions as the businesses pick up the momentum.

Journey Ahead for Economic Revival

The staggered opening of the economy is generating positive hopes for the businesses. The government with the Central bank working along its side implemented varying federal and monetary measures to keep the economy afloat. The stimulus packages injected cash into the country’s system to assist the business moving and avoiding the stagnation in the cash flow. Meanwhile, RBA also reduced the cash rate with the similar objective.

ALSO READ: Australia – 3 things pushed ahead

The government’s efforts were directed at supporting the individuals, bolstering businesses and ensuring the credit flow. The government-backed loans with 50% Government guarantee and RBA reducing the cost of credit were aimed to stimulate the economic activity amidst the lockdown.

Going forward, the government remains keen to implement economic boosting methods that would largely propel financial restoration for the country. Australian Treasurer Josh Frydenberg indicating the upside of the reopening stated that the “GDP will increase by $9.4 billion each month”.

The fiscal package that was directed at alleviating the economic depression has piled up government debt which would be reflected in the Treasury Deficit in the October Budget. The increasing spending levels as pointed by Commonwealth Bank is fostering hope.

Western Australian government deemed mining as an essential service and planned to keep it open when the rest of the country was under strict Covid-19 restriction. It is expected to provide support to the dwindling economy through sustained jobs and continued operations.

The tax reform is mulled by the government especially concerning to the ‘stamp duty’ which for long is targeted for being very expensive. The move if taken is expected to propel the real estate market as the Covid-19 is negatively affecting the housing demands.

The government is considering infrastructural spending that is likely to boost the growth prospects and enable the businesses to compete internationally post the Covid-19 period. In the wake of the job losses and rising unemployment rate amidst Covid-19, the government is also planning of developing the skills program, which would increase employment opportunities.

Currently as the country slowly commences its activities, the state travel restrictions are imposed. The government however plans on reducing the restrictions depending upon the Covid-19 scenario in the country. The talks on opening the ‘Trans-Tasman Trade’ between Australia and New Zealand is further enhancing the prospects of tourism recovery. Morrison stated the possibility of bringing back the international students in the third phase of the opening in July.

Challenges Facing the Economic Restoration

While Australia drafts it economic recovery plans, the obstacles stay in place that could backfire its motives. The threat of the second wave of infection still looms over the country. If the Covid-19 cases again picks the pace, Australia is expected to face extreme level of financial hardships.

Australian trade is strongly integrated to the international players, which significantly contributed towards the nation’s GDP. The international conditions in European countries and the USA still remain critical. While China, which is the largest exporter of Australian products is back into action, the border closure and the aggravating tension between Australia and China can affect the recovery process.

The government and people still remain apprehensive of the international travel, which may convert into long-term distress for the travel companies. The government in the face of varying upcoming challenges, is moulding its approaches that could suit the changing demands of the time.


The resilience amidst the unprecedented upheavals remains as the key to restoration of economy. Technology stood at the forefront of the battle against the coronavirus as the shoppers turn to online delivery platforms. Many businesses by the adoption of the innovative cloud platforms amidst the lockdown sustained their business operations. The road to the economic recovery would be paved through the adoption of the new business and supply chain models that minimises waste and ensures operational efficiency. Alongside, the integration of the business capabilities and the policy reform from the part of the government can assist Australia to glide smoothly out of the crisis.



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