Vaccine Passports Incoming: What it Means For Australia
Published 6:15 am 10 Sep 2021
Who will need them and how will the passports impact the economy?
Last week, Prime Minister, Scott Morrison threw his support behind the concept of vaccine passports being used by Australian businesses, stating “It’s got nothing to do with ideology, and these issues around liberty and so on. We all believe in freedom, but we also believe in people being healthy.
“The sheer fact of it is, if you’re not vaccinated, you represent a greater public health risk to yourself, to your family, to your community and others about you, so it’s only sensible that people will do sensible things to protect their public health.”
The Prime Minister’s statements follow sentiments shared by state leaders like New South Wales’ Premier Gladys Berejiklian and Victoria’s Premier Dan Andrews. Speaking on vaccine passports, Andrews has previously stated:
“There is going to be a vaccinated economy, and you get to participate in that if you are vaccinated,” the Victorian Premier stated.
“We’re going to move to a situation where, to protect the health system, we are going to lock out people who are not vaccinated and can be.”
New South Wales’ Premier Gladys Berejiklian has stated that the proposed vaccine passport will be implemented in the first two weeks of October via the Service NSW app that residents already use to sign into public venues and businesses.
Whilst the concept of vaccine passports has been met with much ire and contention throughout parts of the world, as was witnessed in Canada and France with crowds coming out to protest against the proposal, the same level of resistance to the idea does not seem to be as prevalent here in Australia, according to polling data from The Guardian.
Polling indicates that 72% of Australians support requiring people to prove they are vaccinated before travelling interstate, and 63% would back a requirement that people prove they are fully vaccinated before entering public venues such as bars and restaurants.
So what will this mean for the economy?
Resumption of International Travel
One of the most noticeable effects of COVID-19 has been the cessation of international travel and international migrants into Australia. And, because Australia’s population growth is primarily driven by overseas migrants, 2020 saw the first decline in Australia’s population in over 100 years, with the population declining by 4,200 people, or 0.02%.
This lack of international travel saw a decline in rental values in cities as international students were no longer arriving, and domestic residents left in search of cheaper areas given that they didn’t have to work in offices amid covid.
Hopefully, the introduction of vaccine passports could see a resumption of international migrants returning to Australia in the near future.
Trade minister, Dan Tehan has said that “in the coming weeks we will have a system up and ready so when we hit that 70% or 80% vaccination mark Australians will be able to travel overseas again,” and we will “be able to start welcoming international students, those who want to come here to work, ultimately tourists again.”
However, given that universities and workplaces have had to adapt to a new COVID environment, many have had to shift to online models, meaning the need for a physically present workforce is no longer essential. As a result, this could mean a reduced intake of international students moving forward, and a lower rise in rental growth than many industry experts had previously predicted.
With the added prospect of international travel being back on people’s agendas, the increases we saw in household savings during the lockdowns, much of which was poured back into the housing market, means the likely outcome will see a reversal of this trend and a shift towards increased household spending on consumables and services which have for some time, been considered non-essential.
Back in Business
While Australia has narrowly avoided a technical recession amid the Delta variant lockdowns, many business owners have been struggling, with at least 390 businesses across Australia going into liquidation during August as lockdowns persist across VIC and NSW.
Consumer confidence took a hit when lockdowns re-emerged in New South Wales and Victoria, and there was less financial aid for businesses amid these latest lockdowns compared with the JobKeeper subsidy that was provided throughout 2020.
Carlos Cacho, the chief economist at Jarden, has said that:
“We estimate that total fiscal stimulus over August was worth $6.5 billion, compared to an average of $27 billion a month over the second half of 2020.”
As such, he predicts the rebound from these latest lockdowns to be less than what was seen in 2020, as consumers have less stimulus to rely on.
However, as lockdown restrictions ease across the country, consumer confidence will return and businesses should still see an uptick in patronage, particularly in areas that were previously off-limits, like dining in, going to the pub and seeing movies.
Though unlike prior relaxations to lockdown measures which were dependent upon a reduction in case numbers, Australians will be living with COVID for the first time as states abandon the “COVID Zero” strategy in favour of heightened vaccination numbers.
As such, it’s likely that there will be some initial hesitancy toward crowded venues, and many people may continue to opt for takeout until they adjust to the “new normal” of living with the virus.
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