Covid-19 achieved what the Asian financial crisis of 1997, the dotcom crash of 2001 and the 2008 global financial crisis failed to do - it plunged Australia into recession for the first time since 1991.
After the world’s longest growth run, the devastating bushfires of late 2019 and early 2020 made a recession likely, but Covid made it a racing certainty.
Australia’s gross domestic product (GDP) fell by 0.3 per cent in the first quarter of 2020 and the country fell into recession with a 7 per cent drop in the second quarter.
Almost one million people lost their jobs, but the Liberal-National coalition government moved quicker than most countries to tackle the crisis, following the previous Labor government’s response to the global financial crisis – go hard, go early, go households.
With vaccines, we put too much into Astra Zeneca as a big bet when we should have seen <a class="search" href='javascript:window.parent.actionEventData({$contentId:"7.1213540", $action:"view", $target:"work"})' polopoly:contentid="7.1213540" polopoly:searchtag="tag_company">Pfizer</a> and <a class="search" href='javascript:window.parent.actionEventData({$contentId:"7.1213540", $action:"view", $target:"work"})' polopoly:contentid="7.1213540" polopoly:searchtag="tag_company">Moderna</a> and Johnson & Johnson as possibilities too
In March, 2020 the government announced three separate stimulus packages, worth a cumulative AU$213.6 billion (€136 billionn). This, along with a very tight border control that kept Covid deaths to a minimum – just 909 in a country of 25 million, with 820 of those in the state of Victoria – worked, and Australia’s economy was back in black with GDP growth of 3.4 per cent and 3.1 per cent in last year’s third and fourth quarters.
But Australia's vaccine rollout has been far less assured and the four million doses prime minister Scott Morrison promised in January would be in people's arms by the end of March fell short by 3.4 million. The latest update is many Australians will not be fully vaccinated until next year.
While the opposition Labor leader Anthony Albanese has labelled the vaccine rollout a “debacle”, University of New South Wales economics professor Tim Harcourt says “it will come good eventually”.
"The vaccination in some ways has been a bit like our trade policy putting all our eggs in the China basket. With vaccines, we put too much into Astra Zeneca as a big bet when we should have seen Pfizer and Moderna and Johnson & Johnson as possibilities too," Mr Harcourt told The Irish Times.
“They really needed to have a portfolio of vaccines and I think they had stars in their eyes about the University of Queensland doing some big deal with Oxford [where the Astra Zeneca vaccine was developed] and it came back to bite them.”
Barry Corr, chief executive of the Irish Australian Chamber of Commerce, says as the economy improves, vacancies are rising, which could be good news for Irish people hoping to move to Australia when such travel is again possible.
We're getting significant skills shortages, such as engineers and project managers, around some of the major infrastructure projects
“We’re getting significant skills shortages, such as engineers and project managers, around some of the major infrastructure projects. Everybody wants their project going right now, so that sort of phase in that you might have seen previously isn’t as prevalent. Every Australian state wants to get their own economy ticking over.”
Mr Corr says the recovery is well under way. “Businesses are doing really well. Some businesses definitely had a very difficult 2020, but most have come out the other side in some form.
“Our hospitality members are telling us they just cannot get bar staff because there are no backpackers coming in [due to Covid restrictions]. The agricultural industry can’t get people to bring the crops in because that backpacker workforce is just not there.”
Australia’s relationship with China, its biggest trading partner, became increasingly tense last April when Australia backed a global inquiry into the origins of the coronavirus.
This led to massive tariffs of up to 200 per cent on some Australian exports to China. But not on iron ore, with China buying 80 per cent of Australia’s exports of the commodity in January.
Mr Harcourt says the dominance of iron ore exports is “partially due to Covid, but it’s also partially the Chinese political reaction, which no one predicted. They’ve gone after barley, wool and wine [with tariffs] but they won’t dare touch iron ore because they’re so reliant on Australia. They really have to protect that supply chain.”
As in other countries, the economy and political fortunes are inextricably linked. The prime minister was widely criticised for going on holiday to Hawaii during the bushfires, but was later praised for his handling of the Covid crisis.
The perceived mishandling of the vaccine rollout has seen his government fall behind Labor in polling numbers, though.
“Morrison had a bad bushfires,” said Mr Harcourt, “but he had a good Covid and now he’s just got to watch how he handles the rollout. He’s still got a chance to recover before the election, but he hasn’t been good the last couple of months.”
