Bursting your bubble

The news from Australia is still unfolding with a daily dose of highs and lows.  Yesterday NSW recorded no new COVID-19 cases for the first time since February 29. The same result was reported in Queensland.  This evening the national toll of reported cases is sitting at 6980. These numbers surpass even the most optimistic of forecasts published less than two months ago.

Incredibly, the nation’s COVID-19 death toll currently sits at 98. It had been stable with one less victim for almost a week.  Sadly, another passenger from the deadly Ruby Princess cruise ship pass away overnight.  Elsewhere, health care officials are battling persistent coronavirus clusters in northwest Tasmania, a Sydney nursing home and a Melbourne abattoir.

This week Australia begins its first tentative steps towards winding back its lockdown restrictions.  The Government has announced a three-step plan for putting us back on the road to recovery. While individual states will determine their own timeline through each step, their collective goal is to have all steps in place nation-wide by mid-July.

Step 1 will focus on carefully reopening the economy, and giving Australians opportunities to return to work and social activities. This includes gatherings of up to 10 people, up to 5 visitors in the family home and some local and regional travel. NSW and the city of Sydney are preparing to unwind its first tranche of stage one restrictions on Friday. For example, several major retail chains are reopening and restaurants can offer seating for up to ten diners.

Step 2 builds on step 1 with gatherings of up to 20. More businesses will be permitted to reopen including gyms, beauty services and entertainment venues such as galleries and cinemas.

The final step will see a transition to COVID safe ways of living and working, with gatherings of up to 100 people. Arrangements under step 3 will be the ‘new normal’ while the virus remains a threat. However, international travel and mass gatherings over 100 people will remain restricted until further notice.

Chief Medical Officer Brendan Murphy told a senate inquiry today that it’s "inevitable" Australia will have more coronavirus outbreaks as restrictions on movement ease, but the health system is well prepared. However, with two-thirds of COVID-19 cases in Australia acquired overseas, he believes, international borders will have to remain closed.  Some commentators suggest it’ll be sometime in 2021 before Australian are free to travel overseas again.

The new normal still looks rather terrifying. The Commonwealth Bank, Australia’s largest bank, has released modelling showing house prices could fall by almost a third by the end of 2022 under a prolonged economic slump, as it braces for a sharp rise in soured loans caused by the coronavirus.

Tomorrow the Australian Bureau of Statistics will release its April employment report. All expectations are for the largest ever increase in the number of people out of work. The jobless rate is likely to soar through 7 per cent or higher.

Analysts are tipping anywhere between 400,000 and 650,000 people to have become unemployed in a single month. The previous monthly record, of 65,400 jobs lost in October 1982 during that year's deep recession, will be dwarfed by the April result.

The Government is also facing the largest budget deficit in Australian fiscal history. Deloitte Access Economics predicts it could reach $143 billion this year and $131.6 billion in 2020-21 as the economy slumps due to measures aimed at stopping the pandemic's spread.  The hard work has only just begun.

UPDATE: 15 April
Australia has suffered its single largest monthly fall in the number of people holding a job, with a record 594,000 drop in the number of workers during April.

Figures released by the Australian Bureau of Statistics yesterday showed the unemployment rate spiking a full percentage point to 6.2 per cent last month. 

The participation rate, which measures the number of people in work and also those looking for it, fell 2.4 percentage points. This also helped to keep a lid on the overall jobless rate.

The number of officially unemployed people jumped by 104,500 to more than 823,300. The previous largest increase in unemployment in a single month was 65,400 in October 1982 during that year's recession. The jobless rate peaked at 10.5 per cent the following year.

It's the largest number of people out of work since September 1994. The bureau only started measuring the jobs market on a monthly basis in 1978.