Divided states should return to economic life in time for Christmas

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“Households have accumulated $ 167 billion in additional bank deposits since February of last year. “

But interstate travel to destinations beyond Victoria, NSW or ACT still seems a long way off, according to Eslake.

“What I suspect is that the country is sort of splitting in two,” he said.

“We could indeed have two countries and some people are actually arguing that this may be the less worst option under the circumstances we find ourselves in.”

Traffic is already effectively free between Western Australia, Tasmania, South Australia and the Northern Territory as well as most parts of Queensland and the governments of these states and territories have made clear their reluctance to open the borders if the number of cases remains high elsewhere in Australia.

HSBC Bank Chief Economist Paul Bloxham also noted on Monday the deep divide between Victoria, NSW and ACT and what he described as “zero tolerance and elimination states” that do not exist. were not committed to opening their borders.

Independent economist Saul Eslake.Credit:Pat Scala

Announcing Victoria’s road map out of lockdown on Sunday, Prime Minister Daniel Andrews said he wanted the border with New South Wales to be reopened “as soon as possible”, but on Monday he said he couldn’t designate a date for this to happen.

But Dr Risse said even a limited opening of the borders would allow a partial revival of the national short-stay tourism trade, worth $ 66 billion a year, and the vital Sydney-Melbourne air route, which is there. one of the pillars of the country’s 27 billion dollars. -year business travel sector.

“For NSW and Victoria to consider joining forces as a more open economy, there is probably a lot of economic value to be gained as we know this is a heavily populated flight route and it not only facilitates holidays and leisure, but also business activities which is really necessary to keep the economy strong, ”said Dr Risse.

“Economically, there is more to be gained from Victoria and NSW and ACT opening their borders to each other, rather than keeping them closed. At the same time, I think it makes a lot of sense that the states where COVID is currently contained are maintaining these border closures even if the tourism industries in those states are suffering. “

Ms Timbrell said a return to non-essential retail in mid-November is expected to trigger a wave of consumer spending in New South Wales and Victoria strong enough to pull the national economy back, as measured by the gross domestic product, in positive territory in the December quarter. reporting period.

“When people come out of lockdown, not only do they immediately go back to their normal spending level, but you actually see a small period in which household spending performs much better,” she said.

“We still see a big increase in household spending in the week leading up to Christmas, with a lot of unorganized people, and we see more and more very big spending on Black Friday. [the last Friday in November].

“If we can see Sydney and Melbourne out of lockdown for half of the fourth quarter [December quarter], it will be a very good start to recoup some of the losses we expect from Q3 [September quarter]. “

Kellie Langeliers is getting ready for a few busy months at her company, Plover Wellbeing.

Kellie Langeliers is getting ready for a few busy months at her company, Plover Wellbeing. Credit:Enrique Ascui

Kellie Langeliers said Age that she and her 20 employees at Plover Wellbeing in Mornington were confident they would be rushed as soon as they reopen, which she says will be in early November.

“Last November, we were up 20.6% from the previous November,” she said.

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“In December, we were up about 15%. In December, because we sell a lot of gifts, we are always out of breath. But even so, a 15% growth in December is quite extraordinary. “

Away from the closed borders posing a threat to Ms Langeliers’ business, the owner of Plover claims the Mornington Peninsula has become the mecca for Melburnians banned from traveling further.

“We have this captive audience here now that has nowhere to go,” she said.

“The peninsula will remain a favorite destination, and I think people will be more nervous this year about the border closures.”

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