COVID-19: Impact, challenges and opportunities
The COVID-19 pandemic has had a serious impact on economic activity across the globe. For the first time since World War II, both advanced and emerging economies have gone into recession in what is the worst global downturn since the Great Depression.
Australia experienced its first recession in almost three decades. Nevertheless, the economic outlook for Australia has been comparatively positive viewed against the international context, reflecting the milder virus outbreak and the role of macroeconomic policy support, including JobKeeper, in limiting the economic shock.
For Australia’s services exporters, the impact of COVID-19 has been significant. For example, services exports for the June quarter in 2020 were 26.8 per cent lower than the June quarter in 2019.
Restrictions on people movements have had a profound impact on our two leading services exports: international education and tourism. The tourism industry alone was estimated as suffering revenue losses of $10 billion per month over the initial six to eight months of the pandemic. At the end of 2020, social distancing measures and employment reductions had shut down the film and TV industry and left the music sector reeling.
While COVID-19 has the potential to inflict long-term damage to the services sector, it has also served to create opportunities for those sub-sectors able to move their work to digital platforms and build resilience into supply chains. There has been a concerted and possibly lasting shift to digital processes across the services sector, including from telemedicine and working from home to a shift to paperless processes.
The impact of COVID-19 on our economy and businesses will require new ways of working. Supporting Australian businesses during this difficult transition is a top priority for the Government.
There are many elements covered in this Action Plan that identify the Government’s actions that are focused on ensuring that Australian services businesses are best placed re-engage internationally coming out of COVID-19.