It was a glorious sunrise down at Sunshine Beach this morning, and it’s become abundantly clear that Australia is getting back to business now.
The tradies were out in force, the jackhammers were very active as renovation and construction has resumed, coffee shops have reopened, and virtually every parking space in the suburb was full as the fear of COVID-19 has evidently dissipated.
The government will roll out its own plan for removing restrictions, but Aussies are using common sense and generally voting with their feet…and credit cards.
AMP’s Shane Oliver this week highlighted three of the key reasons why Australia is so well placed to rebound from the shutdown as compared to other countries around the world.
Firstly, we have flattened the curve of the Coronavirus remarkably quickly, to the extent that there are now only 20 remaining cases in ICU (which represents less than 1 percent of ICU beds capacity).
Secondly, we’ve always said that Australia was in a strong fiscal position thanks in part to the resources boom and some prudent Budget management.
And our fiscal response has been the biggest across the entire G20 – not in terms of loans and guarantees, which tend to saddle businesses and individuals with more debt – but in terms of direct fiscal support, actual spending and revenue measures.
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The government stimulus packages were originally designed with a 6-month hibernation of the economy in mind, but we could and should be back to business much sooner than that.
Thirdly, China has long since brought COVID-19 under control, and as such is 2 or 3 months ahead of the rest of the world in ramping up its activity, with early signals suggesting infrastructure bullishness and a construction uplift.
This is terrific news for Australia, since China is now by far our most important trading partner, and we should benefit in terms of our resources economy.
Indeed the international trade figures for March showed a tremdendous uplift in the value of Aussie exports, especially to China.
Of course the second quarter of 2020 will inevitably produce some horrible numbers for growth and unemployment, and not only in Australia.
But a combination of monetary and fiscal responses should see us begin the great rebound in the third quarter.
I discussed this a little further in the short video below: