COUNTRY REPORT: AUSTRALIA
The pandemic acted as a “shockwave” in Australia’s economy
Australia weathers the COVID-19 crisis The federal and state governments have managed the impacts of the pandemic effectively, but some business sectors still need policy support to cope with revenue losses.
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s a developed country that has enjoyed more than 20 years of continued economic growth, Australia consistently stands strong in the face of crises. However, the COVID-19 outbreak has shown that even resilient economies are not completely immune to the massive impact of a pandemic. In Australia and across the world, the fallout resulting from COVID-19 is profound for large businesses whose operations rely on global supply chains, as well as for small and medium-sized enterprises (SMEs) whose survival depends on day-to-day earnings. Lockdowns required to contain the spread of the virus and protect the population have created an economic emergency, necessitating solutions that blend cautiousness and pragmatism. These challenging times give rise to a few important questions: Which sectors of the Australian 26
SINGAPORE BUSINESS REVIEW | JUNE 2021
economy are most affected by the pandemic? How have businesses weathered the crisis? What steps did the government and private sectors taken to ensure economic recovery whilst protecting public health? Several economic analysts have examined the economic situation in Australia in the context of recent events. They have also presented their growth forecasts for 2021, as summarised in this report. Business faces a tough test Dr Pradeep Philip, lead partner at Deloitte Access Economics, describes the pandemic as a “shockwave through the economy and the community”. To keep businesses afloat, “the government has launched programmes to keep workers employed, provide supplementary income to those on welfare, reduce tax liabilities for businesses—all had a positive impact on businesses, workers, and the community,” he explains.
The key to Australia’s success in navigating this situation is an integrated approach to public health and economic concerns
These programmes also involve strategies to manage worker attendance in offices, the movement of workers from home to office, and enterprises’ access to markets. Philip adds that “as governments [in neighbouring countries] quickly enacted strong fiscal stimulus measures, the Reserve Bank of Australia [also] ensured there was liquidity in markets. The increase in government debt has been more than offset by the period of record low interest rates.” Shahana Mukherjee, economist at Moody’s Analytics, says that “COVID-related restrictions have severely hurt businesses, with industries such as transport, hotels and restaurants more acutely affected than others. Forced closures have asymmetrically affected SMEs in particular, which have relied on policy support to cushion the impact of lost revenue.” Businesses experiencing financial strain have received
