Fortunately, the Queensland Government gave a firm commitment to reopen the state to interstate visitors on 17 December, and I doubt the Omicron variant will force the Government to cancel that reopening. It would wreck the government politically, just as the carbon tax wrecked the Gillard Government and the U-Turn ultimately wrecked Ted Heath’s UK Government. Cancelling the 17 December interstate reopening would cause hardship for families looking to reunite and would shatter business confidence in the tourism sector, so I strongly expect the reopening will proceed as planned.
The reopening to overseas arrivals is being delayed, but from a macroeconomic perspective that isn’t a big problem because, pre-COVID, international travel meant money actually left Australia in net terms. Pre-COVID, Australians spent more money overseas than foreigners spent here, around $19 billion more (see the National Tourism Satellite Account). Of course, I should note there will be some impact of the delayed international reopening, particularly as it may delay the entry of some skilled labour needed by industry, and also it will restrict the arrival of potential foreign investors wanting to check out prospective investments in Australia.
Tomorrow, the ABS will publish the latest National Accounts which will show the full extent of the costly lockdowns in NSW and Victoria, and we will see a fall in GDP of a few percent in Australia in September quarter (see Treasury Secretary Steve Kennedy’s remarks last month reported in Australia’s economy expected to have shrunk about 3% in September quarter). Obviously, the National Accounts will reveal Queensland had a much better September quarter than NSW and Victoria, as we only had two mini-lockdowns compared with their crushing months-long lockdowns.
October retail turnover data suggest the NSW and Victorian economies recovered partly once the lockdowns were ended, NSW much more so than Victoria (see the chart below based on ABS data published last Friday). WA is way out in front, and Queensland is second among the States, in terms of retail trade relative to pre-COVID levels.* The WA and Queensland Governments will argue data such as these help justify the harsh and cruel border restrictions they have imposed. But those restrictions came at a large social cost, preventing families from reuniting and blighting the lives of many Queenslanders who have been stranded outside the state. What a shameful and awful policy measure.
*Among States and Territories, NT is in second place, at 17.3% above the pre-COVID level, while Queensland is 16.6% above. WA remains the clear leader, at 23.1% above.
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