As the enormity of the Covid crisis hit home here in early March 2020, one of the most important decisions was made that would help establish Australia as the envy of the world in suppressing the virus. On 13th
March, the new National Cabinet replaced the often-criticised annual Council of Australian Governments (COAG) meetings. By July, this new approach to managing the Federation had proved sufficiently successful at bringing a cohesive and collaborative State and Territory leadership to combat the Covid- 19 pandemic, that it was made permanent.
Over the ensuing months, while some tensions emerged during discussions over the various border closures, the benefits of the National Cabinet outweighed the bickering. NSW subsequently emerged with what was to be labelled by the Prime Minister as the ‘Gold Standard’ for contact tracing and controlling the virus.
This set Sydney up in a prime position to bounce back first from the lockdowns and the resultant Covid-induced recession, helping to rebuild both business and consumer confidence while Melbournians continued suffering strict lock-down and Queensland remained isolated. NSW Premier Gladys Berejiklian may have disagreed with some States’ leaders on matters of border closures, but her government was working well together, and recent figures indicate that NSW is in a much stronger economic position than other States.
In contrast to Victoria the NSW Government has worked to have enabled a private sector-led recovery, with a big spending State Budget
in November that included an increase of its $97 billion infrastructure pipeline to an unprecedented $107 billion. Although the predicted $16 billion budget deficit for 2021 no doubt contributed to the recent downgrading by S&P of NSW’s AAA
credit rating, even the Reserve Bank Governor has been encouraging governments to leverage both sides of the balance sheet and borrow more while cost of debt has never been so cheap and monetary policy has all but run out of room to assist in the nation’s economic recovery.
Despite record Federal and State deficits, the success of governments in combating Covid has rebuilt public trust and confidence in government. In times of crisis the Australian community looks to governments and rely on them to look after both their health and economic livelihoods. This increase in trust of government during Covid appears to come at a time when many other institutions including the big banks and the church have suffered a loss of trust for various reasons.
It was evident that during the darkest days of Covid, people quickly looked to government for National and State leadership and in return they readily complied with the many restrictions and recommendations put in place to protect public health and protect and restart the economy.
The Covid challenges and changes stretch from attitudes through to actions. Not only has there been a greater acceptance of budget deficits over the previous penchants for Federal and State governments surpluses, but many businesses have proved their ability to be extremely agile and entrepreneurial, allowing them to adjust and transform their business models and practices to capture new markets and create new products and the government has embraced policies and procedures that previously have taken years to reform.
The critical next step in Sydney’s recovery is to get more people to return to their workplaces. Central Business Districts ecosystem serves the State and the nation. Sydney, like many other cities globally, was largely brought to a standstill by COVID-19 and its associated health and government regulations. Sydney city and its surrounding town centres experienced a significant fall in economic activity whether measured by foot traffic, business revenue, tourist numbers, public transport usage, office occupancy rates, retail spending, or other measures, causing a devastating impact on this economic ecosystem. It is estimated that Sydney’s CBD office space is still running at less than half of pre Covid levels impacting the many large and small businesses across professional services, hospitality, arts and culture and tourism.
With unexpected and unprecedented impact on lives and livelihood that 2020 brought it is perhaps only the brave who would make predictions as to the year ahead. Whether it is in relation to energy, industrial relations, trade relations with China or a vaccine there remains many challenges and potential changes in politics, policy, and the pandemic that National Cabinet and the nation will need to address.
Here is to a 2021 that we continue to be the envy of the world.
Find out more by tuning into the video or podcast
As a part of the Sydney Business Chamber Corporate Affairs Series an online forum with Jennifer Hewett, National Affairs columnist, Australian Financial Review was held on Thursday 3 December 2020.
Media contact: David Peters 0413 872 491
Sydney Business Chamber had been the leading voice for business in Sydney for 200 years. We advocate, influence, and deliver policies and outcomes to drive economic growth and create opportunities to invest, work, live and visit our city.
Recommended Reading: Health and the Economy - The Hon Gladys Berejiklian MP, Premier of NSW