COVID-19 Impact
How coronavirus affected the Australian economy
The economic impacts of COVID-19 did not become serious until March 2020 when the number of cases for the virus increased. At the beginning of the month, confirmed cases were just 25 but this soon increased drastically with the last two weeks of that month averaging 293 cases daily. By the middle of the month, it has already been declared as a pandemic by the World Health Organisation (WHO), and the Federal Government already announced two stimulus packages. The Reserve Bank of Australia (RBA) had also announced its plans for implementing comprehensive measures targeted at supporting the economy and sustaining the major financial markets.
The Australian Bureau of Statistics conducted several surveys. One of such is the Business Impacts of COVID-19 survey, which provided data on the effects of the coronavirus on businesses operating in the country. Businesses most felt the adverse impacts in the food service and accommodation industry while businesses in the professional, scientific, and technical services were the least affected by the virus’s adverse impacts. The one significant problem that most businesses faced since the beginning of the pandemic and all the months after was the local demand reduction.
There is a disproportionate impact of the pandemic on business in the food services and accommodation industry. This is clearly shown in the Weekly Payroll Jobs and Wages in Australia. This publication showed that the industry suffered a 25.6% fall in jobs in less than a month from the middle of March to early April. The total number of payroll jobs declined from mid-march to early May was 7.3% with the bulk of it happening between the end of March and early April.
While there was a decline in wages and jobs on one side, there were also food shortages, as many people resorted to panic buying as they had to quickly transition to remote work from home in compliance with the social distancing regulation. By the middle of April, average daily cases have dropped, and the JobKeeper Payment, which is the third stimulus package was announced at this point. The food services and accommodation industry continued to suffer most of the virus’s economic impacts with a decline in turnover and wages and jobs.
The decline in cases continued till May, and it became more evident the extent of the virus on the economy. By May, about 55% of Australian businesses were accessing government support, such as wage subsidies and changed how they operate. The economic impacts also affected households with many three-quarters of parents having to keep their children at home from childcare and schools, thereby changing their working hours, working from home, or taking leave from work.