Australian Treasurer Josh Frydenberg said Australians could look forward to a “bright summer” as COVID-19 restrictions ease across the states and the economy recovers.
Frydenberg told parliament during question time that the federal government had already spent $17 billion to support the households and businesses during the pandemic.
“This has helped support households and businesses in their hour of need and ensure that our economy is primed for a strong recovery,” he said.
Frydenberg noted that New South Wales (NSW), which began reopening on Oct. 11, recorded positive data during its first week after lockdown.
According to the National Australia Bank credit data, people in the state spent $825 million (US$614.5 million) during the week, a 54 percent increase compared to the week before and a 10 percent increase compared to the same time last year.
Spending figures also increased by over 500 percent at beauty stores and over 300 percent at clothing stores, while pubs and restaurants had a more modest 50 percent increase.
According to ANZ Research data, while spending on recreational dining did not raise as strongly as other categories, very strong dining booking activity was observed, suggesting it will increase over the coming weeks.
“We know that, as the restrictions are eased, our economy will continue to strengthen, and the jobs will come back,” Frydenberg said. “We know that business and consumer confidence were both up last week.
Frydenberg also noted there was an extra $330 billion (US$245.8 billion) on household and business balance sheets compared to last year. Additionally, job ads were 21 percent higher compared to the start of the pandemic, and Fitch reaffirmed its AAA credit rating for Australia.
“So Australians can look forward to a bright summer. Australians know that their economy is resilient in the face of this big economic shock,” he said.
Further, ANZ-Roy Morgan’s consumer confidence index has risen for the sixth week in a row, but at a much lower rate compared to the spike in confidence out of the last NSW lockdown in May 2020.
“The rise in confidence in the city [Sydney] over the past two weeks has been quite modest at 3.5 percent. This compares with the 9.2 percent rise over the first two weeks of reopening last year in May 2020,” ANZ head of Australian economics David Plank said. “The difference reflects the level of confidence.”
“The economy [is] anticipated to bounce back as vaccination rates continue to rise and restrictions are eased,” the RBA said in its October meeting. “In the central scenario, the economy would return to growth in the December quarter and to its pre-Delta path in the second half of 2022.”
It also reiterated that it would commit to maintaining the current cash rate until Australia returns to full employment and the inflation rate is consistent with the target.
“The central scenario for the economy is that this condition will not be met before 2024,” the RBA said. “Meeting this condition will require the labour market to be tight enough to generate materially higher wages growth than at the time of the meeting.”