Economic Recovery - Australia's Action-Packed Plan for July

  • May 06, 2020 AEST
  • Team Kalkine
Economic Recovery - Australia's Action-Packed Plan for July

Although every COVID-19 affected nation is going great lengths to slow the spread of the pandemic, some countries stay ahead of the curve. Australia is one of them that has flattened the curve of COVID-19 transmission, with just about 1,000 cases active in the nation. Experts suggest other countries to learn from Australia that has been able to keep the number of coronavirus infections and deaths low, owing to its early mitigation efforts to prevent the spread of disease.

Backed by the success of its suppression approach to cope up with the coronavirus crisis, Australia is gearing up to get its economy back on a more sustainable level. In comments after the recent National Cabinet Meeting with state and territory leaders, the Australian PM, Mr Scott Morrison has emphasized on getting 1 million people back to work and kickstarting the nation’s economy.

Focussing on the job losses due to COVID-19, Mr Morrison has highlighted the importance of flattening the unemployment curve and making workplaces coronavirus-safe.

Why Unemployment Curve Needs to be Flattened?

The PM’s comments came after a recent ABS release, indicating millions of people losing their jobs since coronavirus restrictions came into existence. The latest ABS data suggests that the number of jobs have plunged by about 7.5 per cent between 14th March 2020 and 18th April 2020, with Accommodation and food services and Arts and recreation services industries losing the most jobs.

 

 

With hundreds of thousands of people becoming unemployed, the nation’s economy is losing about $4 billion every week amidst coronavirus induced restrictions. Mr Morrison released shocking federal Treasury estimates in a latest press release, highlighting the cost of continuing with lockdown restrictions. According to the estimates,

  • School closures will cost 304,000 jobs
  • 708,000 jobs to be hit or lost by restrictions
  • Hospitality sector to suffer a job loss of 441,000 jobs
  • Retail, construction and arts & recreation sectors will see job losses of 146,000, 120,000 and 180,000, respectively.

 

Reporting the current state of the economy, Mr Morrison cited that about 5 million people are estimated to be on JobKeeper payment, with over a million on the JobSeeker payment. Moreover, more than a million people are accessing their own super of around $10 billion.

Government Plans to Restart Economy by July 2020

The Australian government is seeking ways to re-start the economy by July 2020, with an intention to re-open the businesses in a COVID-safe environment. Establishing a sustainable coronavirus safe economy will be a subject of domestic surge health response capacity, robust tracing, testing and epidemiology results.

National Cabinet has decided to set up a 3-step framework to slowly remove baseline restrictions, allowing people to reside in a coronavirus safe economy. The government is also developing a toolkit for businesses to assist them become work ready in COVID-19 safe economy.

However, the government has left the decision to ascertain the timeframe for advancing between steps and particular restrictions to remove on individual territories and states. This is due to the fact that different states and territories are at different levels of coronavirus pandemic response, with six of eight territories and states noting several zero case days.

It is worth mentioning that the Northern Territory has planned to remove several restrictions by 5th June 2020, while retaining hygiene, social distancing and travel restrictions.

For creating a COVID-19 Safe Australia, certain health measures need to remain in place for a significant period of time, including strong hygiene, international travel restrictions and social distancing.

Resumption of Businesses to Coincide with trans-Tasman Travel Bubble

The resumption of businesses by July 2020 is likely to coincide with the opening of travel ties between Australia and New Zealand. Both the countries are considering unlocking borders for trans-Tasman Travel Bubble, easing travel restrictions and allowing quarantine free travel.

Mr Morrison and New Zealand PM Jacinda Ardern have recently agreed to begin work on trans-Tasman coronavirus-safe travel zone and put it in place as soon as it is safe to initiate so. The travel bubble will be launched after all the required transport, health and other protocols have been met and developed, ensuring the safety of public health.

Australia invited New Zealand for the travel agreement owing to the latter’s success in controlling the spread of coronavirus disease.

Recognising the travel bubble as mutually beneficial for both the countries, the Prime Ministers believe it will:

  • assist in economic recovery and trade,
  • help kick-start the transport and tourism sectors,
  • reunite family and friends, and
  • enhance sporting contacts.

 

After instituting effective travel arrangements across the Tasman, both the countries will explore opportunities to enhance the concept to members of their Pacific family, facilitating travel between Pacific island countries and Australia and New Zealand.

With a fundamental focus on the safety of its citizens, Australia’s success in suppressing the spread of coronavirus pandemic is highly praiseworthy. As the nation embarks on easing social distancing rules and restrictive measures across different states and territories, how soon the economy will get back on track needs to be watched out for.

Must Read! Catch Sight of Key Highlights from RBA Monetary Policy Minutes

 


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